Net-lease investment fell significantly in the second quarter 2020, but comprised the highest share of total volume on record amid a sharp decline in commercial real estate investment activity caused by the COVID-19 pandemic.
Net-lease investment (comprising office, industrial and retail properties) reached 20.2 percent of total commercial real estate investment in the second quarter 2020, up from 13.3 percent in the first quarter 2020 — the sector’s highest percentage on record, according to the latest research from CBRE.
The net-lease sector’s performance relative to the rest of the commercial real estate asset class reflects investors’ attraction to the long-term leases and creditworthy tenants considered safe attributes during an economic downturn. Net-lease exhibited a similar trend during the Great Financial Crisis (GFC) when its share of total commercial real estate volume increased to 14.9 percent for full year 2009 from 6.9 percent for full-year 2007.
