Discount Retail (e.g., Dollar General)

Investors are drawn to the simplicity: a recognizable brand, everyday-needs traffic, and a format that is easy to understand. The appeal is real. But lease term is the critical variable in this category, and it is the one most buyers underweight.

As remaining term shortens, cap rates rise — and the market is pricing in uncertainty. If you buy mid-lease and hold too long, you may find yourself selling into an expiration event, which narrows your buyer pool and compresses your pricing at exactly the wrong time.

The screening question to run first: if I hold this three to five years, how much lease term is left when I sell? Then ask what the real estate does if the tenant vacates. Retail boxes left behind in thinner markets can be difficult to re-tenant. Plan B depends heavily on location, and location is worth scrutinizing before you fall in love with the brand.

Specialty Retail (e.g., Sherwin-Williams)

Smaller footprints on strong retail corridors can be sticky assets. Contractors and consumers value convenience, and the store format tends to be adaptable. But lease terms in this category sometimes run shorter than big-box retail, which means you need to understand both the remaining term and the site fundamentals before drawing conclusions.

The right screen here starts with lease options, not the tenant name. Then evaluate the corridor: would other tenants want this location if the current one left? A strong plan B — meaning a site that other users would compete for — reduces your downside risk significantly and strengthens your position with a future buyer’s lender.

Medical and Dental (e.g., Aspen Dental)

Medical use can feel durable. People need care in every market, and specialized buildouts often make tenants more committed to staying through lease expiration. High-traffic nodes with co-located services strengthen the case further.

But tenant quality requires more scrutiny here than in retail categories. The question that matters most is who is actually on the lease. Is it a corporate guarantee, a franchisee obligation, or no guarantee at all? That distinction changes the risk profile of the asset substantially. A dental buildout is specialized — re-tenanting is possible, but plan for time and improvement costs if it comes to that.

Screen it by establishing the guarantee structure first, then ask what the space becomes if it is no longer a dental use. If it sits in a strong retail node with multiple potential users, that answer gets much easier.

Convenience Retail (e.g., 7-Eleven)

When the site is right, convenience retail can be among the strongest real estate in the NNN category. Hard corners — signalized intersections with easy ingress and egress — generate consistent traffic and tend to hold value across market cycles. Location is often everything here, more so than in other categories.

But this category introduces complexity that others do not. Fuel versus no-fuel configurations, varying lease structures, rent bump terms, and — most importantly — environmental considerations tied to underground tanks and fuel sites. These are not disqualifying, but they require specific due diligence before you proceed.

The screen starts with the site: access, corner influence, and traffic count. Then review lease term and options. If there are fuel components, request any available environmental reporting before going further. Environmental unknowns are the one variable in this category that can fundamentally change the deal.

Automotive Services (e.g., Take Five Oil Change)

Service-based automotive uses carry a degree of resilience that other retail categories do not. People keep cars longer in economic downturns, which supports consistent demand even when consumer spending tightens. Real estate tends to be on visible corridors with good access, and the plan B story is often better than expected — other automotive and service tenants frequently want the same type of site.

The risk lives in brand and operator quality. Many of these concepts are relatively newer in some markets, which means store-level operating history may be limited. Underwriting a tenant whose long-term viability at a specific location is not yet established requires more conservatism than a category with a 30-year performance record.

Screen it by evaluating lease term and renewal options first, then corridor quality. The practical test: if this tenant left, which other service users would want this location, and how quickly?