Hunger for yield driving big gains in net lease sector
December 4, 2019 | Real Estate Weekly
U.S. net-lease investment in 2019 is on pace to surpass last year’s record level, with an increasing number of domestic and foreign investors attracted to this asset class by the prospect for strong risk-adjusted returns, according to the latest research from CBRE.
Net-lease investment — comprising office, industrial and retail properties — increased by 30.2 percent year-over-year to $20.9 billion in Q3 2019, the third-highest quarterly total on record.
Investment volume in Q3 2019 was driven by a 48.5 percent year-over-year gain for the industrial sector and a 22.1 percent gain for the office sector, with the retail sector increasing by 8.8 percent. Net-lease investment volume year-to-date through Q3 2019 climbed 24% year-over-year to $55.2 billion and outpaced the broader commercial real estate market. The net-lease share of total commercial real estate investment stood at 14.6% in Q3 2019, one of the highest quarterly shares of this cycle and higher than the 11%-to-13% range held since 2012.
