From time to time, GRS Group likes to highlight its clients and industry associates that are thought leaders in commercial real estate. For this installment, we have a guest column by Daniel Herrold, a senior director with Stan Johnson Co., who weighs in on the net-lease sector.
Stan Johnson Company
In the net lease marketplace, volumes were down in 2016 as compared to the previous year. According to Stan Johnson Company, net lease volume for 2016 was approximately $52.5 billion, down nearly 18 percent as compared to the previous year. There were a several variables that gave investors pause last year.
For one, the institutional buyer pool is a significant buyer in the net lease marketplace. Institutions are constantly evaluating where interest rates and cap rates are heading, and they adjust their buying and selling patterns accordingly. In the first half of 2016, institutions were net sellers; aggressively disposing of assets within their portfolio that weren’t performing well or those assets that contained a tremendous amount of extractable value. Most real estate investment trusts (REITs) were effectively selling, attempting to take advantage of the aggressive cap rate market.
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