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Net Lease Share of Investment Volume Exceeds 2009 Levels

Even with a 2.6% year-over-year decline in the first quarter, net lease investment sales performed as they have in prior downturns. The sector—encompassing the office, industrial and retail categories—represented 15.4% of all investment sales volume over the four quarters ending March 31, CBRE reports. That compares to a 15.1% share in 2009.

CBRE notes that net-lease investments provide attractive risk-adjusted returns from long-term leases with creditworthy tenants. “These returns are particularly appealing in times of uncertainty,” the firm reports. 

The Q1 decline of 2.6% Y-O-Y compares to an 18.3% decline for the broader commercial real estate market. Moreover, it represents a 10% increase over Q1 2019 volume.

The office sector’s share of total net-lease investment volume increased by 5.3 percentage points over the preceding year to 41.5%, according to CBRE. Retail’s share fell by 5.4 percentage points to 15.1%, while industrial’s share remained relatively unchanged at 43.4%. 

Pictured: Industrial properties such as this Fedex-leased South Windsor, CT facility have represented 43.4% of net lease sales volume over the past 12 months.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types as well as delving into broader subject matter. He produces 15-20 daily news stories per day and also works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.

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