With money to burn but still having a strong aversion to risk, investors have increasingly turned single-tenant properties into one of the hottest commercial real estate plays in the country.
For the last quarter of 2010 and first two quarters of this year, CoStar Group shows that sales of single-tenant properties have averaged more than 10,000 transactions per quarter – the highest quarterly totals on record. And for third quarter comparable sales CoStar is showing that pace is continuing.
So far this year, CoStar has tallied more than 30,000 single-tenant sales valued at $29.2 billion in all property types. Retail sales have accounted for about half of the activity.
The single-tenant, net lease investment sales market is expected to continue growing, according to Jones Lang LaSalle.
“The low interest rate environment and the lack of safe-haven investment alternatives are driving new sources in build-to-suit and sale-leaseback activity, and investors have incredibly healthy appetites for stable and dependable income streams that single-tenant assets provide,” said Guy Ponticiello, managing director Jones Lang LaSalle’s Corporate Finance & Net Lease division.