Rising 10-year Treasury yields pose increasing headwinds to net lease REITs, but the sector is positioned to deliver better earnings growth this year as acquisitions increase and tenants regain post-pandemic footing. Most REITs outlined in new analysis by Baird Equity Research are posting favorable acquisition guidance, and quality assets are in big demand, which may lead to cap rate compression. 

The 10-year Treasury recently rose 1.57% over a matter of weeks, up 107 basis points from an August 2020 low.  Baird notes collapsing credit spreads have tempered the rise in 10-year Treasuries, and many net lease REITs ended last year with positive acquisition momentum, thanks in part to declining COVID cases and favorable capital markets for deals. Baird also points to the “meme stock rally” that paved the way for AMC Entertainment to raise equity as an example of how some brands were able to access low-cost capital.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.