U.S. Single-Tenant Net-Leased Retail
National Report

Spending priorities favor single-tenant. The outlook for dining and necessity retail remains positive as summer approaches, despite a flat trend in overall consumer spending. Continued inflation, labor market concerns and high interest rates are influencing households to prioritize social interactions over big ticket items that were popular during lockdowns. In March, restaurant and bar spending was up 13 percent annually, a sign consumers continue to frequent quick service restaurants and fast casual chains, including Chipotle and Noodles & Company, as their budgets reduce. Households are also concentrating their spending on essential goods. In the first quarter, sales in stores — not including restaurants — were up more than 4 percent year-over-year. The divergence between these segments’ performance and overall retail spending has positive implications for net-leased fundamentals at a time when single-tenant vacancy is historically low.