Industrial Properties Dominate Net-Lease Market

NORTHBROOK, IL-Investors in net-lease properties have picked industrial properties as their favorite sector, according to 1031 exchange and net-lease specialists The Boulder Group. While industrial properties make up 18% of the current for-sale market in number, the price tags account for 25% of the net-lease market, according to the brokerage firm’s fourth-quarter report.

As a result, capitalization rates for industrial properties are running lower than other sectors. However, those industrial properties on the market for less than seven figures are trading at an average capitalization rate of 9.46%, while those selling above $10 million are trading at an 8.22% capitalization rate, according to The Boulder Group. In between, though, properties offered in the $4-million to $5-million range are on the market at a 6.65% cap rate.

“With the number of available industrial properties being so limited, now is the ideal time to consider disposing of industrial net-leased properties,” writes The Boulder Group research director Jeff Rothbart.