FOR NET LEASE
real estate world,” Randy Blankenstein,
president of The Boulder Group, a bou-
tique firm specializing in net-lease invest-
ments, says. “It doesn’t offer large upside or
much downside. People want to switch to
net lease for stable cash flow and income
for the years ahead.”
This is still largely true. Last year, for
instance, net lease investment volume
increased by 10.9% to a record $77.5 bil-
lion, according to CBRE. At the same time,
though, current trends in the space and
larger commercial real estate environment
are offering up both new opportunities and
challenges to investors.
For instance, the sector has become
crowded, and institutional players have
been able to execute large and quicker
deals because of their scale and access to
resources, edging out small-to-midsize
developers in some instances.
Investors are also recalibrating assets foradaptive reuse, figuring out reconfigura-tion of particular properties. And due toconstruction and land costs against steadyrents, it’s become more difficult for investors to price out properties.
To meet these challenges, net lease players have gotten creative, joint venturing,purchasing already developed assets in secondary markets, and thinking about assetclasses in new ways.
To cite one example, car washes andlube shops have won investors big gains,