Diversified rent rolls of local service businesses can produce more resilient cash flow than a single-tenant big-box lease.
Small-bay industrial trades at a discount to bulk distribution on a per-square-foot basis, yet it frequently produces higher net rents and lower rollover risk.
The reason is granularity. A twelve-unit park with twelve local tenants rarely loses more than a fraction of its income at once, and market rents reprice faster on short lease terms.
The trade-off is operational intensity. These assets require real management — which is precisely why owner-operators tend to outperform passive capital in the category.