As we move deeper into 2025, the net lease market continues to evolve, shaped by shifting economic conditions, migration patterns, and tenant performance across the country. For passive-income buyers and 1031 exchangers, understanding which states offer the strongest NNN opportunities is essential.
Today’s investors aren’t just chasing yield—they’re looking for long-term tenant stability, growth markets, and predictable cash flow. That’s why analyzing NNN cap rates 2025, tenant strength, and regional market dynamics has become more important than ever.
This report breaks down the best states for NNN investment, highlights major tenant performance trends, and provides insight into how investors are positioning themselves for stable returns in a changing economic environment.
Why State-by-State Analysis Matters in 2025
NNN Properties remain one of the most recession-resistant and inflation-protected asset classes. But performance varies widely by state due to:
population migration
job growth trends
development pipelines
tenant expansion plans
local tax environments
availability of quality inventory
For investors working with groups like Triplenet Investment Group, understanding regional strengths is the key to making smarter acquisitions—especially when executing 1031 exchanges under tight deadlines.
Top 7 States Leading the NNN Market in 2025
Below is a breakdown of the top-performing states based on cap rate trends, tenant stability, and demand from national investors.
1. Florida – The Most Active NNN Market in the U.S.
Florida continues to dominate due to its unmatched population growth and strong retail spending.
Why Investors Love Florida:
One of the highest inbound migration rates
Strong sales volumes for QSR, pharmacy, and convenience tenants
Desirable for 1031 buyers seeking tax-friendly environments
Cap Rates Trend (2025): Slight compression for top brands like Chick-fil-A, Starbucks, and Wawa; stable-to-attractive cap rates for AutoZone, Dollar General, and 7-Eleven.
2. Texas – Expansion Capital of the Southwest
Texas is one of the best states for NNN investment due to business-friendly laws and nonstop commercial development.
Strengths:
Multiple growing metros (Austin, Dallas, Houston, San Antonio)
Massive QSR and discount retail expansion
Higher cap rates compared to coastal states
Cap Rates Trend (2025): Generally higher than Florida and California, benefiting yield-focused investors.
3. Tennessee – A Magnet for Corporate Relocations
Tennessee’s economy continues to surge, making it a rising NNN hotspot.
Why It’s on Investor Radars:
No state income tax
Strong performance of Dollar General (HQ in TN)
Increasing demand for grocery, fuel, and QSR tenants
Cap Rates Trend: Stable, with slight upward pressure creating good buying opportunities.
4. North Carolina – One of the Fastest-Growing Southeast Markets
North Carolina combines affordability, strong job markets, and rapid suburban growth.
Investor Advantages:
High-performing markets like Raleigh, Charlotte, and Wilmington
Strong tenant mix across auto parts, QSR, and medical retail
Attractive land availability for new development
Cap Rates Trend: Compressed in high-growth metros; more favorable in tertiary markets.
5. Arizona – Supply-Constrained but High-Demand
Arizona has become a top destination for investors exiting California.
Why Investors Are Buying Here:
Strong Phoenix metro population growth
Heavy demand for medical retail and drive-thru QSR
Ideal environment for 1031 exchanges
Cap Rates Trend: Lower than many states, but tenant performance is exceptionally stable.
6. Ohio – High-Yield State for NNN Buyers
Ohio remains one of the best yield markets for national buyers looking for NNN Properties with stronger returns.
Investor Benefits:
Higher cap rates than coastal or Sun Belt states
Excellent tenant mix: CVS, Walgreens, AutoZone, Dollar Tree, Tractor Supply
Many new construction net lease sites in suburban corridors
Cap Rates Trend: Attractive and slightly rising—great for investors who prioritize yield.
7. Nevada – A Dark Horse Winner for 2025
Nevada is gaining attention thanks to its rising population and business-friendly tax structure.
Why It’s Becoming a Hot Market:
Strong tenant demand in Las Vegas and Reno
Very limited land supply in key corridors
Top market for ground leases and corporate QSR prototypes
Cap Rates Trend: Compressing due to high demand and limited inventory.
Tenant Performance Trends That Matter in 2025
To understand the national NNN report landscape, investors must look beyond cap rates and focus on tenant categories that are outperforming.
Top-Performing Tenant Categories in 2025
1. Quick-Service Restaurants (QSR)
Still the strongest-performing category nationally
Many brands expanding aggressively: Chick-fil-A, Raising Cane’s, Dutch Bros, Starbucks
2. Auto Parts Stores
Very stable, needs-based spending
Strong operators: AutoZone, O’Reilly, Advance Auto Parts
3. Dollar Stores
High demand in both urban and rural markets
DG and Dollar Tree are major drivers
4. Medical Retail
Urgent care, dental, and dialysis centers
Recession-resistant, long leases, strong credit
5. Convenience & Fuel
How Investors Are Positioning Themselves in 2025
With shifting market conditions, smart NNN buyers are focusing on:
1. High-credit tenants with long leases
Predictable, risk-adjusted returns remain the priority.
2. States with strong population growth
More people = stronger tenant performance and higher site traffic.
3. New construction assets
Especially appealing for 1031 exchanges seeking minimal maintenance.
4. Ground leases and corporately guaranteed deals
Popular thanks to predictable rental escalations and low landlord responsibilities.
5. Inflation-protected leases
Annual rent increases are more valuable than ever.
Final Thoughts: The Best States for NNN Investors in 2025
The NNN landscape in 2025 is dynamic, but several themes remain clear:
The Southeast is booming
The Southwest offers huge growth potential
Midwest markets provide the best yields
Western states like Nevada are emerging as competitive alternatives
With strong demand from national buyers, the support of groups like Triplenet Investment Group, and ongoing activity from 1031 exchangers, NNN Properties remain one of the most attractive and stable asset classes in U.S. real estate.
For investors looking to build resilient, long-term passive income, the top NNN states outlined above offer some of the strongest opportunities in the current market.