Challenges and Opportunities in Net Lease

McChesney: “Pricing for net-lease investments that have fewer years remaining on the initial lease term has softened.”

CORONA DEL MAR, CA—Rising interest rates are having a direct impact on investors’ purchasing decisions, but the single-tenant net-leased market has always been the place to find high-quality, low-management investment real estate, Hanley Investment Group EVP Jeremy McChesney tells GlobeSt.com. We spoke with McChesney about how he would characterize the state of the sector today. (For a more in-depth feature on the net-lease market, see the July/August issue of Real Estate Forum.)

McChesney says the market is still very vibrant, and although the frothiness of the sector has slowed some, investor demand for new, well-located single-tenant triple-net-leased properties with credit tenants and properties with a long-term, corporate-guaranteed lease remains very strong. “Buyers seeking long-term stable cash flow with relatively low risk and little to no maintenance are continuing to pay premium prices for these types of properties.”