Net lease retail estate investment trusts (REITs) have been experiencing rapidly increasing demand over the past year, which is only expected to continue for the foreseeable future. As more investment pours into this asset, prices are rising and average cap rates are falling - two things which are making investors trying to sell this asset very happy.
A recent study by The Boulder Group, a brokerage operating on a national scale, the cap rates of net leased properties experienced large falls on average across the board. Furthermore, despite there being a significant increase in the quantity of net leased real estate properties appearing on the market in the last two quarters of 2021, demand has greatly exceeded the available supply.
This finding indicates that, in order to capitalize on this lucrative income stream, investors need to use effective channels, such as Net Lease World, in order to navigate this competitive market.
The Rise of Net Lease Investment
Just as is the case with assets across the board, there are specific types of net leased properties that are seeing greater growth than their counterparts. Out of the three types of net lease properties (commercial, retail and industrial), industrial is experiencing the greatest growth, though net leases for retail areas are in high demand as investment vehicles too.
On a holistic scale, the eminence of established investors is expanding in the net lease market due to the fact convenience and reliability in the long term the asset demonstrates. However, significant investment is also occurring from private origins, with net leases attached to smaller-scale properties (often for only one tenant) being the primary focus.
In the second quarter of 2021, the capacity of total investments in the net lease market expanded by almost 90%, reaching an astonishing $18 bn. Over the course of the same quarter, the total amount of money flowing into real estate had increased by nearly 180%.
Why This Investment?
So you've heard about the growth this market is experiencing but don't understand the appeal, or why it is so popular among investors. The answer to these questions is multi-faceted, but the primary reason for the popularity of this asset is their non-committal and low hassle nature.
Engaging in any other tenancy agreement incurs natural responsibilities, such as insurance, tax and costs for property damage. By contrast, this asset provides a convenient income stream that requires very little work on the landlord's behalf, as all duties are delegated to the tenant. The tradeoff is slightly lower income when compared to regular tenancy agreements.
Another appealing factor of net lease real estates is that there are a great number of sub categories to this asset (i.e. many property types) which can be invested in. These vary from commercial to single-tenant properties - with the only quality that these properties share being the manner in which the tenancy agreement is arranged.
The structure of net lease tenancy agreements aims to generate high profits in the long term by shifting the responsibility for costs such as taxes, property maintenance and insurance to the tenant.
Net Lease World
Due to the incredibly high demand (and limited supply) for this asset, it is essential that investors use the best platform in order to optimize their chances of securing these properties. Net Lease World is a contemporary firm that specializes in net lease real estate and 1031 exchanges.
Net Lease World provides a simple means by which its users can find the highest quality net lease properties to invest in from across the nation. Their team of experienced brokers assists their clients in buying net lease properties ranging all the way from single-tenant to commercial real estate.
This online platform provides a redefined method of trading net lease properties with its beautiful and user-friendly UI. It is the modern approach to navigating the net lease market, and offers the best services in its class, helping clients to steer the 1031 exchange procedure with confidence.
To see available nnn properties for sale, feel free to visit Net Lease World's website for an incredible selection of these valuable real estate assets.