Commercial Real Estate Research & Forecast Report
Single tenant investment demand is high – supply is lacking
Cap rates remained compressed with a nominal average change in single tenant net lease assets during the first half of 2021. Overall, demand for quality investment-grade credit properties has remained high while supply has continued to be a challenge for investors.
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- Capitalization rates for single tenant investments continue to compress as demand increases
- Single tenant deal volume was moderate
- Lack of supply is a challenge
Due to minimal returns on the higher quality assets, these short term lease deals have become much more attractive to investors than they have been in years prior. As the country continues to open up we will see increased transaction volume, especially in activity-based retail like gyms and movie theatres that were forced to close during the pandemic.
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