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Research - JANUARY 12, 2021

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Net lease shows resilience amid pandemic

by Loretta Clodfelter

The net-lease property sector has demonstrated resilience during the COVID-19 pandemic.

That strength can be seen in the record low cap rates for single-tenant net-lease retail, office and industrial properties. According to The Boulder Group, cap rates for net-lease industrial, retail and office assets compressed to 6.75 percent, 6.0 percent and 6.9 percent, respectively, in fourth quarter 2020.

Occupiers of single-tenant net-lease properties have tended to be essential businesses, and many have been able to remain open despite the COVID-19 pandemic and efforts to contain the virus.

Mary Fedewa, president, COO and director of STORE Capital, noted the firm’s rent collections have increased to 90 percent in November from a low point in May. “At this point nearly all our tenants are open for business,” said Fedewa. “The remaining deferrals are centered in a few highly impacted indu

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