As we find ourselves at the dawn of the third quarter of 2014 here are six net lease market trends that are important to note:
- Investor demand is still far exceeding supply in the net lease market, which is continuing to drive cap rate compression.
- As a result of the limited supply, institutional investors are forced to become more and more creative in finding their acquisition opportunities. In most cases, institutional investors are being out-bid by private investors. In an effort to counteract this, REITs have began changing their focus to large industrial assets. The general thought is the private investor would not be competitive on an asset with a price point above $5 million. With e-commerce driving the demand for large industrial space the vacancy in that market is steadily decreasing.
- Investors chasing yield in a market with such limited supply has resulted in an uptick of activity of the “sub-investment grade” sector. follow the link above to read the rest on our home Blog