The net lease sector has seen a year like no other commercial real estate sector. Despite a once-in-a-millennium pandemic, the sector is riding a two-year high on fundamentals that have only strengthened over the past year.
While many sectors in commercial real estate have shown weak rents and lower occupancy levels leading to lower values, many subsectors of single tenant net lease (STNL) retail have seen compressed cap rates post-COVID. Essential retail has been the buzzword of the year, and excepting perhaps healthcare real estate, no other sector has more essential retail users that single tenant net lease. Retailers like