Single Tenant Net lease Q1 2024 Market Insights

The single-tenant net lease (STNL) market demonstrated resilience in Q1 2024, with investment sales activity rising by 26% from the previous quarter to $11.2 billion, despite a 4.5% decrease compared to the same period last year. The $9.3 billion merger between Spirit Realty Capital and Realty Income Corporation significantly contributed to the total volume. REA | Real Estate Advisors found that across all tracked tenants, there was a positive 32 basis points difference in cap rates between marketed and sold properties, suggesting investors are paying slightly below asking prices. The STNL market’s ability to sustain momentum amidst economic challenges highlights the enduring appeal and stability of these investments. However, the STNL market continues to struggle to compete with the 10-year Treasury yield, which ranged from 3.18% to 4.35% in Q1, forcing most properties to increase their cap rates by 100-200 basis points above the 10-year Treasury yield to remain competitive. Despite this, REA | Real Estate Advisors anticipates strong performance for the STNL market in 2024 as investors pursue reliable income streams and long-term value appreciation. Should any investors require an evaluation of their property, REA | Real Estate Advisors is readily available to provide a complimentary broker opinion of value and offer strategic insights. Our experience and commitment lie in helping investors navigate the evolving STNL market, enabling them to make informed decisions and optimize their real estate investments.