How Will Net Lease Retail Assets Fare During and Post-COVID-19?
For assets leased by essential service providers, the cap rates haven’t changed, says one market insider. “But if there’s any kind of hair on the deal… it’s not doing well.”
April 22, 2020 | Liz Wolf | National Real Estate Investor
The net lease retail sector boasts a reputation for being a solid investment with high-credit tenants and low default rates. Similar to bonds, during normal times, net lease properties offer long-term, stable and predictable returns.
However, in the face of the COVID-19 pandemic and government-mandated shutdowns, what does the future hold for this asset class? Investors in net lease properties have significant exposure to retail, restaurant and experiential categories, which are facing some of the fiercest challenges during the crisis.
The sector, however, is coming off a healthy year of transaction activity.
