NET LEASE ASSETS WERE ONE OF THE DARLINGS OF
COMMERCIAL REAL ESTATE DURING 2014, BUT GIVEN THE DEARTH
OF PRODUCT AND GROWING NUMBER OF INTERESTED INVESTORS,
CAN IT KEEP GENERATING THE RIGHT RETURNS FOR 2015?
Net Lease Review
Can Net Lease Keep Up the Pace?
Everybody and their uncle wanted to wn a net-leased property in 2014, and for good reason. By nature, the
asset class is low maintenance for owners,
the properties are usually occupied by single tenants on very long-term leases, and
the purchase prices tend to be lower than
other asset classes like office and industrial.
But statistics show that returns on these
properties continue to decline, creating
challenges for investors. The Boulder
Group, a boutique investment real estate
firm specializing in single-tenant net-lease
properties, reports that during fourth-quar-ter 2014, cap rates for net-leased retail
properties remained at a historic low level
By Carrie Rossenfeld