Six NNN triple net lease tenant sectors that are best in bear AND bull markets

The trends of tech and e-commerce due to the pandemic, continue to reshape NNN Investing.  However, here are SIX niches of NNN net lease or triple net properties are and will be resilient through market cycles. Make note.

• DIY/Home Renovation

Home improvement stores saw a huge jump in foot traffic due to the spike in home sales nationally. For example, Home Depot reports a 270% jump with a 133% increase in online sales. Industry reports suggest home renovation has increased by over 63 percent in August 2020 compared to 2019. Lowe’s ecommerce division also reports a shocking 150 percent increase. 

• Grocers

Retail grocers have greatly benefited from being essential in this pandemic since lockdown measures encourage consumers to dine and work from home.  For example, Whole Foods is expanding by 32 new locations by the end of 2021.  All discount grocery retailers are seeing a lift in sales as consumers continue to buy increasing dollars of grocery essentials. LIDL USA is rapidly increasing the number of their small-store concepts, as are Walmart, Kroger, Whole Foods, Albertsons and Aldi.   

• Restaurant

Fast casual restaurants have responded by turning on dime to long-term consumer trends with a huge focus on convenience, delivery and healthy eating. As the industry consolidates around cost, trend and location, there will also be more and better, culled NNN triple net lease investment opportunities. For instance Bojangles, Subway, Jimmy Johns, and Five Guys clearly state that they expect fast casual brands such as theirs, to grab market share from QSR.

• Car Repair

Lowered incomes amongst many demographics including business, stay-at-home and work-from-home routines, are prompting more DIY maintenance and vehicle repair, rather than new vehicle purchase.   Car repair and service retailers are located in highly-trafficked retail areas, which provide convenience for businesses and consumers.  While customer preferences may be changing rapidly, this sector remains the backbone of the economy’s physical goods infrastructure.

• Pharmacy

In an oligopolistic market, a few players dominate this essential and highly resilient NNN net lease market given the undeniable effects of graying demographics of the US population.   Walgreens, CVS and the up and coming Amazon Online pharmacy. Now, pharmacies across the U.S. are also valid federal partners, to distribute free coronavirus vaccines. CVS is focusing on medical services through HealthHUBs and expanding and increasing offerings via MinuteClinic. Walgreens bought VillageMD, a national provider of primary care, and PWNHealth, another branded diagnostics and clinician network.  

• Discount/Dollar

Dollar stores have more locations combined than the country’s top six largest brick-and-mortar grocery and superstore retailers.  The prospects for dollar stores is only getting stronger as other retailers wither.   Dollar stores have a small-box model and most offer NNN triple net lease investors, corporate guaranteed leases with no management responsibility and have national brands with carefully selected, phenomenal locations. Dollar stores target low-income shoppers in rural areas desperate for retail options. In these rural areas, dollar stores lack competition and go where no other retailers will go.