Single-Tenant Net-Lease Retail

Retailers face varying degrees of tariff exposure. Following significant changes to U.S. trade policy, a 10 percent blanket tariff now covers nearly all imports from countries outside Canada and Mexico. Products from China, meanwhile, now face a minimum tariff rate of 30 percent after a deal was reached on May 12 to temporarily cut duties for 90 days. Sector-specific tariffs of 25 percent still remain on steel, aluminum and foreign automobiles, while exclusions for some products — especially pharmaceuticals — may soon expire. These inplace tariffs, and the potential for higher country-specific rates as early as July, are impacting retailers’ operations and business decisions. While food-related retailers are only mildly impacted, department and auto parts stores are being acutely affected. Overall, however, a high percentage of net-lease tenants slot into the mildly to moderately exposed categories — a boon for single-tenant property owners.