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Just like every other asset class, real estate is subject to trends. Shopping malls were all the rage a few decades ago until a successful online bookstore branched out and started shutting the lights off all over the country. The work-from-home concept rendered entire blocks of office buildings obsolete, so now they're being turned into apartment buildings through government funding.

However, one type of commercial real estate has displayed a higher level of resilience — necessity-based retail.

First National Realty Partners (FNRP) is an investment company that has optimized its business model around that concept. It only sponsors real estate where people "live, shop, work and play," focusing on properties essential to daily life, such as grocery stores, multi-family housing and industrial real estate. This structure boosts the likelihood that the demand stays consistent regardless of economic fluctuations.

With over $2 billion in assets under management, more than 60 current assets owned and over $100 million in total investor distributions since inception, FNRP’s track record is nothing short of stellar. However, the most impressive aspect lies in the returns it has generated for its investors. Since it set up shop in 2015, the company has delivered a 14% annualized net internal rate of return (IRR). Digging a bit under the surface reveals the inner workings that have led to such a remarkable feat.

Strategic Focus On Top Grocers

Over the years, FNRP gained the trust of the top grocers in the U.S. who chose to become the firm's tenants, including Kroger, Walmart, Whole Foods, Target and others. With such a strong command over the grocery-anchored real estate landscape, the company secures on- and off-market deals and "makes money on the buy." One Wisconsin Pick ‘n Save store is one such case. In a span of just one year and two months, the investors in the property secured a net IRR of 45.01%.

The grocery-anchored concept isn't unique. Kimco Realty Corp. (NYSE:KIM) is a real estate investment trust (REIT) with a market cap of nearly $12.5 billion. The REIT has a strong focus on grocery-anchored shopping centers, boasting many of the same top tenants as FNRP.

However, Kimco Realty's returns have been less than stellar over the past decade with an average annualized return of just 2.92%.

Direct Investments vs. REITs

The major difference between FNRP and companies like Kimco Realty is that FNRP is not a REIT. When you invest in a REIT, you're gaining a tiny share of a large portfolio of properties. In many cases, investors have little insight into property-level data to understand where they're making money and where they're losing it.

FNRP offers direct investments in individual properties. This investment strategy allows you to be more intentional about where your money is going and gives you the ability to choose which properties you feel confident investing in.

Featured image is a stock photo from Shutterstock and is not a property owned by FNRP

This article This Walmart Landlord Has Generated A 14% Net IRR For Its Investors Since 2015 - Here Are Its Latest Investment Offerings originally appeared on Benzinga.com

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