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Research - FEBRUARY 27, 2020

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Record year for U.S. net-lease investment as capital targets secondary markets

by Andrea Zander

U.S. net-lease investment reached record highs in 2019, with investors increasingly attracted to opportunities in high-growth secondary and tertiary markets, according to the latest research from CBRE.

Net-lease investment — comprising office, industrial and retail properties — increased by 10.9 percent in 2019 to a record $77.5 billion, outpacing the growth rate of all commercial real estate. This was despite a 23 percent year-over-year drop in fourth quarter 2019 volume to $19.5 billion — still 18.2 percent above the five-year average.

Some of the largest annual gains for net-lease investment were in San Diego (+110 percent), the Inland Empire (+105 percent), Tampa (+56 percent), Indianapolis (+50 percent) and Memphis (+48 percent). Los Angeles ($5.0 billion), New York City ($4.9 billion) and San Jose ($4.2 billion) had the most full-year net-lease investment in 2019, while Seattle was the most favored market in fourth quarter 2019 ($2.2 billion).

“The

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