For years I’ve made the same argument to anyone who would listen: necessity-based, grocery-anchored retail is the most financeable, most durable product in commercial real estate. You no longer have to take my word for it — the institutional capital markets are now voting with their checkbooks, and the numbers this quarter are hard to ignore.
The Numbers Behind the Stampede
Grocery-anchored retail just posted one of its strongest investment years on record. According to JLL’s Grocery Tracker, U.S. grocery-anchored transaction volume hit roughly $11 billion in 2025 — up about 42% year over year, with the institutional share of buyers at its highest level in more than a decade. CBRE’s data tells the same story: roughly $12.8 billion of grocery-anchored investment in the four quarters ending Q1 2026, and 85% of institutional retail investors naming the format their top preference — the highest of any retail category.
Pricing reflects the demand. Best-in-class, top-market grocery-anchored centers are trading at cap rates in the 5.25%–5.8% range for the strongest credit anchors, with stabilized institutional product generally underwritten to 5.5%–6.25%. In a 4%-plus rate environment, that kind of pricing tells you exactly how investors are weighing the durability of a supermarket rent check.
U.S. grocery-anchored transaction volume in 2025 — up ~42% year over year (JLL), with institutional buyers at their highest share in over a decade.
New Funds Are Raising for Exactly This
Capital isn’t just trading existing assets — it’s forming up to buy more. Nuveen recently added roughly $320 million of new institutional capital to its U.S. Cities Retail Fund, which targets grocery-anchored properties where people both live and work. And a firm called Concorde launched a fund aiming to raise about $300 million to acquire and reposition grocery-anchored centers across Sunbelt markets. When two separate sponsors raise three-quarters of a billion dollars between them for one thesis, that’s not a trend — that’s a mandate.
Why Necessity Retail Keeps Winning
The fundamentals underneath the capital are just as healthy. Convenience and value formats are leading the country’s store-opening growth, and the standout operators are posting records. Casey’s General Stores just delivered its highest-ever earnings — diluted EPS of $19.16, up nearly 31%, and net income of $714.4 million — and announced plans to add at least 120 stores across its 2,900-plus location network, split between new builds and acquisitions. Casey’s also signaled it’s “very bullish” on M&A, with more conversations with small-chain owners than ever before. Translation: the strong necessity operators are buying, building, and taking share — and they need real estate to do it.
What It Means If You Own Retail Real Estate
If you own a well-located, grocery- or necessity-anchored center — particularly in a supply-constrained Northeast market like Long Island — you own precisely the product institutions are competing to buy. A few takeaways from where I sit:
- Your basis is your moat. With construction economics still punishing and infill sites nearly impossible to entitle, existing necessity-anchored centers are trading below replacement cost. That’s the best protection there is heading into any cycle.
- Below-market anchor rent is upside, not a problem. Institutional buyers underwrite mark-to-market on inline space — a long-tenured supermarket paying under-market rent is exactly the kind of embedded growth the smart money pays for.
- Liquidity is real right now. With institutional demand at a decade high, this is a genuine window for owners weighing a sale, recapitalization, or sale-leaseback.
The capital markets have stopped debating whether grocery-anchored retail is a safe bet. They’ve decided. The opportunity now is in owning the right center — and knowing what it’s worth to the people lining up to buy it.
- ICSC, “Institutional Investors Drive Surge in Retail Property Sales.” Link
- CoStar, “From pizza to wings, Casey’s appetite grows with 120-store expansion.” Link
- Business Record, “Casey’s targets 120-store expansion after record earnings year.” Link
- ICSC, “Retail Outlook 2026: Retailer Updates, Development, Investment & Financing News.” Link
President & CEO, Schuckman Realty Inc.
Ken Schuckman is President & CEO of Schuckman Realty Inc., a retail-focused commercial real estate brokerage founded by Stanley Schuckman in 1978 in Hicksville, NY. With 30+ years of experience specializing in supermarket-anchored shopping centers, Ken is a CoStar Power Broker and member of X-Team Retail Advisors. He is also Co-Founder & Principal of BTF Capital Fund. SchuckmanRealty.com