At the end of 2016, mega deals in the net lease United States office sector has propelled sales to record high volumes while retail activity remained limited and a slowdown in industrial activity was starting to occur. How does the net lease sector look six months later? We sat down with our national experts, Tivon Moffitt, Peter Bauman and John Paul Mulhern for an update.
It should be a good second half of the year
Institutional investors continue to have a strong appetite for high quality assets of all net lease property types including office, industrial and retail. While there is a strong interest in portfolios within large metropolitan areas, activity is strong throughout the entire United States indicating that activity in the second half of 2017 will be very robust.
Changing consumer trends are leading to desires for certain types of properties
It’s no secret that consumer trends are changing now more than ever and just about every industry is facing disruption from advancing technology. From mobile banking impacting the number of brick and mortar branches to food service delivery impacting how we obtain meals, these trends are also impacting real estate. As a result, investors are keeping their eye on these types of investment opportunities:
- Office: long-term investments that include 10+ year leases with investment grade credit
- Industrial: e-commerce facilities expected to grow with the rise of online shopping
- Retail: activity-based, service-based and food-based facilities serving the Millennial population
A change in investor strategy may be coming soon
In addition to having interest in certain types of properties, investors are starting to rethink their investment strategies based on changing consumer demands. Most are beginning to search for investment opportunities that include strong credit tenants who will be able to withstand any disruptions that may occur within an industry.
To learn more about the net lease sector, contact these experts and read JLL’s Net Lease First Look.