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Grocery-anchored retail centers continue to be the favored asset class for retail investors. While the retail market has evolved and changed this cycle, grocery-anchored retail has maintained low cap rates and increasing prices. Grocery-anchored retail centers are daily needs and are considered more Internet resistant than other retail types, making them particularly popular this cycle.

“We’ve seen interest continue to increase due to the lack of available supply of high-quality grocery-anchored properties on the market,” Kirk Brummer, director at CBRE’s national retail partners west group, tells GlobeSt.com. “High-performing grocery-anchored centers have been a staple in every real estate cycle—their ability to withstand economic downturns and to generate consistent cash flow growth.”

While the retail market has been struggling this cycle—with many retail centers struggling to compete with ecommerce—cap rates have increased. However, cap rates for grocery-anchored retail product have trended downward while pricing has continued to grow. “While cap rates have increased over the past year for big-box-anchored centers, high-performing grocery-anchored centers have maintained their low cap rates and strong pricing,” Brummer says.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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