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Net-Lease Investment Gains Pace in Q2

U.S. Net-Lease Investment | Q2 2021

30 Sep 2021 1 Minute Read

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  • Net-lease investment volume increased by nearly 90% year-over-year in Q2 2021 to $18.7 billion. Total commercial real estate investment volume grew by 176% over the same period. The broader market's more robust growth was primarily due to base effects. Broader market volumes declined more severely during the downturn, resulting in a sharper recovery.
  • For the year ending in Q2 2021, net-lease investment grew by 3.1% year-over-year, while total commercial real estate investment volume fell by 1.7%.
  • The office sector’s share of total net-lease investment volume in Q2 2021 grew by 80 basis points (bps) year-over-year to 27.4%. The retail and industrial sectors had slightly lower shares than they did a year ago.
  • The average net-lease cap rate for Q2 2021 was unchanged at 6.2%
  • The U.S. 10-year Treasury yield fell to 1.45% at the end of Q2 2021 from a peak of 1.74% in Q1 2021. Spreads between the average net-lease cap rate and the 10-year Treasury rate expanded to 4.73 percentage points.
  • Los Angeles was the most-favored net-lease investment market in Q2 2021, followed by San Francisco, New York City, Chicago and Atlanta.

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