- Grocery-anchored retail is among the most competitive investment niches, with 2025 transaction volume near $11B and cap rates averaging 6.7%, but the grocery label alone doesn’t justify a premium.
- Buyers should study store sales, the grocer’s competitive position and remodel plans, plus lease terms such as sales-based termination rights, co-tenancy clauses and replacement restrictions.
- Brixmor’s Barn Plaza project lifted small-shop occupancy from 84% to 100% at a 9% incremental NOI yield, showing how a smart replacement can rebuild traffic after an anchor leaves.
Buyers are paying up for centers with supermarkets attached, but a grocery anchor alone doesn’t justify the premium, Commercial Property Executive reports.
The underwriting should begin with how the store performs and end with what the lease says if the grocer walks.
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A Crowded Market
Among respondents to JLL’s 2026 retail investor survey, 81% had grocery-anchored centers in their plans and 64% intended to buy more retail this year. JLL’s Grocery Tracker put 2025 deal volume near $11B, up 42%, and year-end cap rates at an average 6.7%, 40 basis points under the 2023 peak.
Supply is scarce. Cushman & Wakefield counted national retail vacancy of 6% in Q2 2026, with just 2.3M SF of new space delivered and asking rents up 2.2% to $25.65 per SF.
The Store Has to Earn It
Jim Hamilton, senior managing director at JLL Capital Markets, told CPE that buyers outnumber available listings, yet most of these centers still sell below replacement cost. Many grocers disclose store sales, so investors can weigh rent against sales.
Those figures tell more when paired with the store’s market position, access, visibility and fit with the operator’s newest format.
Chris Ressa, COO of DLC Management, told CPE the grocery business “is still local.” DLC also checks whether the grocer is funding remodels and keeping shelves full.
A Chicago-Area Test Case
DLC and its partners, Crow Holdings Capital and Temerity Strategic Partners, paid $61.7M in late 2024 for the 314,819 SF Danada Square West in Wheaton, Ill. Jewel-Osco has been the anchor since 1988.
JLL placed a fixed-rate loan of $41.7M with a five-year term from Webster Bank to fund the purchase.
The Anchor Sets the Tone
Brixmor owns roughly 350 open-air centers across 29 states. Matthew Ryan, who oversees its national property operations, told CPE that the grocer shapes the draw of the entire property by sending shoppers to restaurants, services and small shops.
Brixmor’s CEO has made a similar case, as CRE Daily reported.
Read the Lease
Anchor leases frequently last 10 to 20 years at fixed rent steps, Hamilton said. But termination rights tied to sales, co-tenancy clauses and limits on replacement users can change the income picture if the anchor leaves.
Ryan told CPE that Brixmor reviews expected downtime, the condition the box must be returned in and how easily it can be re-leased before it buys.
Replacing the Traffic
In Jackson, N.J., the grocer at Bennetts Mills Plaza said in early 2024 it would close, and Brixmor stuck with grocery. It chose Gourmet Glatt, a regional kosher chain, which opened a supermarket of about 67,000 SF in January 2026.
At Barn Plaza in Doylestown, Pa., space vacated by Marshalls and HomeGoods became Bucks County’s first Whole Foods. The first phase wrapped in Q3 2025 at a net cost of $14.6M, delivering a 9% incremental NOI yield and lifting small-shop occupancy from 84% to 100%.
A $24.5M second phase will swap a former movie theater for three outparcel buildings with 46,000 SF combined.
Why It Matters
Capital keeps chasing the sector. CRE Daily reported that Brixmor and Everview struck a $2.3B deal for Slate Grocery REIT.
With so much money competing for few listings, the danger is paying for stability that an individual asset hasn’t yet shown.
What’s Next
Good stores, friendly lease language and a believable backfill plan can justify the price. Watch how Barn Plaza’s second phase performs, since it will test whether the first phase’s yield repeats.
