After a Slow Start, Net Lease Market Rebounds in PA, NJ
The completed transactions, most of which were classified as “net lease,” were a mix of restaurants, convenience stores/gas stations, discount stores, veterinary clinics, fitness centers and drug stores, spanning across 12 states, including seven in Pennsylvania and five in New Jersey.
PHILADELPHIA—The net lease market in the Philadelphia-New Jersey region began rather slowly this year, but picked up in the second quarter, according to CBRE.
The Philadelphia-based arm of CBRE’s Net-Lease Properties team—made up of SVPs Matthew Gorman, Michael Shover and associates Thomas Finnegan and Robert Thompson—sold 27 properties during the first half of 2019, totaling $104.4 million.
“It was a slow start to the year with interest rates on the rise through the end of 2018,” says CBRE’s Gorman. “The tide turned in our direction, which boosted our activity substantially and resulted in a successful first half of the year.”
The completed transactions, most of which were classified as “net lease,” were a mix of restaurants, convenience stores/gas stations, discount stores, veterinary clinics, fitness centers and drug stores, spanning across 12 states, including seven in Pennsylvania and five in New Jersey.
Noteworthy transactions during the first half of 2019 included the $24-million sale of a two-tenant retail condo property in Philadelphia; a national gym located in Fort Washington, PA, which traded for more than $9 million; four Wawa and Sheetz gas station/convenience stores totaling more than $22.9 million; and eight discount stores (Family Dollar and Dollar General) totaling more than $9.8 million.
“As real estate valuations in product types such as apartments, office and industrial made a comeback, the number of 1031exchange buyers and capital chasing our product type increased,” Shover says.
The CBRE net-lease team specializes in the marketing and sale of single and multi-tenant net-lease investment real estate. In its 15-year history, the team has sold nearly $2 billion in net lease properties nationwide.