WITH CAP RATES LOWER THAN EVER AND
COMPETITION GROWING FOR PROPERTIES TO
OWN, NET LEASE INVESTORS ARE TURNING TO
NEW METHODS IN ORDER TO INCREASE YIELD
Net Lease Forum
New Strategies for
Net Lease Investors
The net lease sector remains one of the most desired types of invest- ment in commercial real estate.
Many investors are drawn to the asset class
because of its promise of low or nonexis-
tent management demands on them, par-
ticularly in triple-net scenarios—so much
so that the scarcity of net lease properties
available to purchase has been well publi-
cized. However, such a highly sought-after
asset class inevitably leads to lower cap
rates and lower yields for investors.
Some of the latest trends in the net
lease sector are what one might expect:
more of the same. But the sector contin-
ues to grow and morph as new investors
enter the fold. “The increased competi-
tion in the net lease space and the demand
for current yield continues to put pressure
on cap rates as well as the length of the
average lease term,” Gino Sabatini, man-
aging director and head of net lease invest-
ments for W. P. Carey, tells Real Estate
Forum. “In addition to traditional net
Global REIT acquired a portfolio of six retail properties from Bon-Ton Stores Inc. for approximately $88 million. Three of the properties are located in
Milwaukee, and the remaining three are located in Green Bay, WI; Fargo, ND; and Joliet, IL.
By Carrie Rossenfeld
