COVID Outbreak Hammering U.S. Commercial Property Investment Activity in 2020
Net-Lease Comprises Bigger Share of Much Less Commercial Real Estate Investment Activity
September 4, 2020 | Michael Gerrity | World Property Journal
Global commercial property consultant CBRE is reporting this week that net-lease investment in the U.S. fell significantly in Q2 2020, but comprised the highest share of total volume on record amid a sharp decline in commercial real estate investment activity caused by the COVID-19 pandemic.
Net-lease investment (comprising office, industrial and retail properties) reached 20.2% of total commercial real estate investment in Q2 2020, up from 13.3% in Q1 2020–the sector’s highest percentage on record, according to the latest research from CBRE.
The net-lease sector’s performance relative to the rest of the commercial real estate asset class reflects investors’ attraction to the long-term leases and creditworthy tenants considered safe attributes during an economic downturn. Net-lease exhibited a similar trend during the Great Financial Crisis (GFC) when its share of total commercial real estate volume increased to 14.9% for full year 2009 from 6.9% for full year 2007. Net-lease properties’ share of total commercial real estate investment volume has been in the 11%-to-13% range since 2012.
