The "Great Recession" of the 2000s generally stirs up negativeconnotations in the commercial real estate community. Developmentstood still. Debt was unavailable. Tenants asked for rentreductions or disappeared. Respectable companies went under.Properties and fortunes were lost.

However, owners of certain single-tenant net-leased propertiesare presented with an opportunity as three post-recession forcescombine: low interest rates, constrained supply of propertiescoming to market and investors looking to put their money to work.The combination of these factors has created demand for STNLs thatoutpaces supply, resulting in rapid compression of capitalizationrates since mid-2010. This situation benefits two distinct groups:return-driven investors who purchased properties during therecession, and long-term cash flow investors who made acquisitionsapproximately 10 years ago.

During the height of the recession, from late 2008 through early2010, demand was weak for all property types due to cash hoardingand lack of debt and equity sources. Investors who did purchaseproperties were able to achieve higher cap rates, especially in theMidwest, where demand was lowest. Now, with constrained supply andmoney flowing in from the coasts due to poor yields there, caprates in the region have fallen dramatically and profits can befound in these properties.