- Net-lease investment volume decreased by 2.6% year-over-year in Q1 2021 to $14.3 billion. Total commercial real estate volume was down 18.3%, according to the most recently updated data from Real Capital Analytics.
- The office sector’s share of total net-lease investment volume increased by 5.3 percentage points over the past 12 months to 41.5%.
- The retail sector’s share fell by 5.4 percentage points to 15.1%, while the industrial sector’s share remained relatively unchanged at 43.4%.
- The average net-lease cap rate remained unchanged at 6.2%.
- 10-year Treasury yields jumped in Q1 2021, causing spreads between the average net-lease cap rate to tighten to 449 basis points by the quarter’s end.
- Boston was the most-favored investment market in Q1 2021.
- Q1 2021 net-lease investment volume, using single-tenant asset transactions as a proxy, fell by 2.6% year-over-year to $14.3 billion. However, Q1 2021 volume was up by 10% from pre-pandemic Q1 2019.
- For the year ending in Q1 2021, net-lease investment volume totaled $60.5 billion, falling by 25.9% compared with the same period last year. Net lease comprised 15.4% of total commercial real estate investment volume, according to updated Q1 data from Real Capital Analytics.
- Net-lease investments provide attractive risk-adjusted returns from long-term leases with creditworthy tenants. These returns are particularly appealing in times of uncertainty. During the COVID-19 pandemic, the net-lease share of all investment activity jumped to 14.7% in 2020. During the Great Recession, it reached 15.1% in 2009.
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