NRF: Retail sales inch up for sixth consecutive month in March Retail sales rose slightly in March despite inflation and high gasoline prices as many consumers received higher-than-usual tax refunds. Core retail sales (excluding restaurants, auto dealers and gas stations) were up 0.41% month over month in March and are up 7.05% year over year, according to the CNBC/Retail Monitor released Tuesday by the National Retail Federation. That compared with increases of 0.27% month over month and 5.87% year over year in February...

By Marc Perlof | MarcRetailGuy CA #01489206 April 13, 2026 If you own retail real estate, here’s what just changed for you. Private equity ownership changes the risk profile of your tenant. Strong brands can become more efficient, but also more sensitive to costs over time. When private equity takes over retailers, your rent may become less predictable. What is changing? Private equity firms are buying or investing in retail brands. After the purchase, they often change how the business is run. One common move is selling the real estate and leasing it back. The company becomes a tenant instead of an owner. This creates fixed rent payments. They also focus on increasing profit quickly. That can include cutting costs, simplifying operations, and shifting more stores to franchisees. These changes can improve efficiency and free up capital, but they can also increase pressure on store-level performance. Why this is happening? Private equity is focused on returns within a set time frame. They use debt and operational changes to increase profits. Real estate is often treated as a source of cash, not a long-term hold. What this does to your value? How does this affect your property value? Your value depends on stable income. Higher leverage and tighter margins make your income less predictable. Uncertainty leads to higher cap rates. Higher cap rates lower your value. A 100 basis point increase in cap rate can reduce your property value by 12% to 18%, depending on income and buyer demand. How are buyers underwriting this today? Buyers are looking past the brand name. They are focusing on unit-level performance and rent levels. If rent is too high compared to sales, they apply a higher cap rate or reduce their offer. What happens if the tenant’s costs increase? When rent, labor, and food costs rise at the same time, weaker locations start to underperform. That is when closures or lease renegotiations happen. Strategic Advice for Retail Property Owners What should you do right now? Review your tenant’s ownership structure. Know if the brand is private equity backed. Do not assume brand strength equals tenant strength. What should you review in your lease? Focus on rent relative to sales, if possible. Rent that gets too high as a percentage of sales creates risk. Also review lease term, options, and guarantor strength. What should you prepare for? Plan for more tenant scrutiny at sale. Buyers will ask deeper questions about store performance and long-term viability. Be ready to support your income with real numbers. Real Deal Insight In today’s market, buyers are underwriting rent relative to store performance or sales, franchisee versus corporate structure, and margin pressure. Deals that once traded aggressively are now being discounted when rent exceeds sustainable levels or when the tenant is more leveraged after a private equity transaction. This is showing up in pricing, cap rates, and buyer demand across Southern California. Owner Self-Assessment If your tenant’s costs increase, can they still comfortably pay your rent? Market Data and Sources Sale-leasebacks are widely used in restaurant and retail sectors to free up capital and create long-term lease obligations.¹ Private equity ownership often increases leverage, which can raise financial risk during downturns.² Restaurant margins are sensitive to labor and food costs, which have increased in recent years.³ If you own retail real estate in Los Angeles or Southern California, this is already showing up in how buyers evaluate NNN properties, strip centers, and single-tenant assets. If you are thinking about selling or refinancing in the next 12 to 24 months, now is the time to evaluate your tenant strength and pricing. Small shifts in cap rates can materially impact your exit value. Is your tenant’s business strong enough to support your rent long term? #RetailRealEstate #NNNProperties #FastFoodRealEstate #CommercialRealEstate #CapRates #LosAngelesRealEstate #CREInvesting #InvestmentProperty #NetLease #RetailInvesting