Rapid Yield Swings Put Halt To Net Lease's Hot 2026 Start

"Things are moving fast," Chang admitted.

"Last week, the prediction was that the Federal Reserve would raise rates by the end of the year. I looked this morning, [and] that's gone. And so we continue to see a lot of uncertainty."

Whiting noted that capital flows are slowing down, singling out LPs, which are "pulling back" and showing more patience right now.

While Yoakam admits "hesitancy" surrounds the market currently, he calls it "hyperbole" and has yet to see big cap rate movements.

"In these moments, we tend to retrench in the data and just try to understand where capital flows are going," Yoakam noted. "All the interest rates are bouncing around a little bit."

Fundamentals Remain Strong

Still, many of the panelists say that the existing fundamentals in net lease remain strong. Particularly, Yoakam points to the operational side of JLL's business.

"The occupier use case is pronounced as ever, and the capital market flows are really good," he highlighted.

"So we're seeing across the board, more lender term sheets, more lender activity, broader buyer bases and seemingly less favorable asset classes getting a lot more attention lately."

And Baumann said that the current market volatility hasn't yet changed the momentum retail investors are showing and noted that demand for 1031 exchanges remains strong at one of ARCTRUS' statutory trusts in Delaware.

"The underlying fundamentals haven't really changed," he explained. "It's the execution strategy in the volatile market of today that's causing a lot of conversation."

Debate Over Interest Rate Impact

The answer to the question that every investor wants is what the short-term and long-term outlook is. At this point, it's everyone's best guess given the rapid recent swings seen in the market.

Still, panelists provided their short-term outlook, with Whiting predicting that interest rates will rise between 25 and 50 basis points. While Chang sees the momentum, he noted that things can get "dicey," citing risks in the economy and the weak hiring in the job market.

Yoakam is more bullish, predicting that JLL will see healthcare activity pick up, while office has continued to see momentum.

And while there was some debate with Sabatini and Pike about whether the treasury yield spikes too high will harm buyer appetite too much, Sabatini insists that WP Carey is in a strong position and can operate in any interest rate environment that's "stable."

"If it's six [percent], it won't make a difference. We'll just price things right," Sabatini said.

"We price deals based on what we think our current and future cost of capital is going to be. And with respect to that, we think we're in a very good place, especially relative to many of our competitors."

The bottom line is knowing how to transact and leveraging experience. This is key to sustaining a long-term strategy in net lease and gaining a competitive advantage in the sector, according to Baumann.

"Every day we have to get to decisions on whether or not we're waiving diligence and ready to proceed," he admitted. "A lot of our business emanates from long term strategy and plan that the seller of the real estate is selling it out of a long term desire to recover capital."

Now, we await the next moves. Investors will be watching President Trump's address to the nation at 9 p.m. tonight closely. Will he announce a ground invasion in the Middle East that escalates tensions or will he continue to insist that the war is coming to an end with a peace deal that's imminent? That's where the industry doesn't have a clear answer on yet.