The Great Migration — and What It Means for NNN Investors
Between 2020 and 2024, the US experienced the most dramatic internal population migration in decades. Millions of Americans moved from the Northeast and California to Texas, Florida, Tennessee, Georgia, Arizona, and the Carolinas. This wasn't just individuals — it was corporations, following their workforce and chasing business-friendly environments.
For NNN investors, this migration created extraordinary opportunity. New residents need fast food, pharmacies, dollar stores, and convenience retailers. Corporate relocations require office-adjacent retail. The Sunbelt's NNN market absorbed over $15B in single-tenant transaction volume in 2024 — representing over 55% of all US net lease activity despite covering less than 30% of the national population.
The Sunbelt's Core Investment Advantages
Tax Environment
Seven of the nine states with zero personal income tax are in or adjacent to the Sunbelt: Texas, Florida, Nevada, Tennessee, and (partially) Wyoming, Alaska, and South Dakota. Zero income tax is the single biggest motivator for high-income individual and corporate relocation. Where the population moves, retail spending follows — and NNN properties capture that spending.
Population Growth
The statistics are stark. Between 2020 and 2024:
- Texas: Added 2.1 million residents — most of any state
- Florida: Added 1.8 million residents — #2 nationally
- Arizona: Grew by 5.2% — one of the fastest rates nationally
- Tennessee: Grew by 7.1% — extraordinary for a mid-size state
- North Carolina: Added 600,000 residents — driven by Research Triangle growth
Corporate Relocation Wave
Major corporations that have relocated to or opened large Sunbelt offices include Tesla (Austin), Toyota (Plano, TX), Charles Schwab (Westlake, TX), Hewlett Packard Enterprise (Houston), Goldman Sachs (Salt Lake City), Oracle (Austin), and TSMC (Phoenix). Each corporate relocation brings thousands of high-income employees who drive retail spending for NNN tenants.
The Top 5 Sunbelt NNN Markets for 2025
1. Dallas-Fort Worth, TX — The National Leader
DFW continues to lead all markets by NNN transaction volume. The combination of no income tax, 50+ Fortune 500 HQs, and population growth exceeding 150,000 residents per year creates extraordinary NNN demand. Cap rates of 4.75–6.5% reflect premier market status.
2. Nashville, TN — The Rising Star
Nashville's combination of zero income tax, Dollar General headquarters, healthcare industry dominance, and explosive millennial in-migration has made it arguably the hottest market on a per-capita basis. Cap rates have compressed significantly — 4.65–6.0% — in just 5 years.
3. Phoenix, AZ — The Manufacturing Catalyst
TSMC's $40B semiconductor campus and Intel's $20B facility have transformed Phoenix from a retirement destination to a serious manufacturing and tech hub. New NNN development is rampant across the suburban ring from Chandler to Buckeye.
4. Atlanta, GA — The Southeast Capital
Atlanta remains the economic hub of the Southeast with 16 Fortune 500 HQs, Hartsfield-Jackson (world's busiest airport), and growing in-migration from the Northeast. Chick-fil-A's HQ presence makes Atlanta a prime market for premium QSR NNN assets.
5. Raleigh-Durham, NC — The Tech Corridor Dark Horse
Research Triangle Park (Apple, Cisco, IBM, Red Hat) and explosive population growth have elevated Raleigh to Tier-1 NNN market status despite its relatively smaller size. Cap rates of 5.25–6.75% offer attractive yields with outstanding growth potential.
One Risk to Watch
Sunbelt cap rate compression has been significant. Markets that offered 6.5–7.5% five years ago now trade at 5.0–6.0%. This makes entry pricing more expensive and reduces the margin of safety. Investors entering the Sunbelt today should focus on the outer suburbs — where new construction is happening and cap rates remain more attractive than infill locations.
The ESS Group specializes in Sunbelt NNN markets and has closed transactions in every major metro from Phoenix to Charlotte. Contact us to access current inventory and receive our quarterly Sunbelt NNN market report.
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