The Long Run: What’s Driving Net Lease Investment

The Weekly Take from CBRE

Net lease assets are attracting more institutional capital. New Mountain Capital’s Teddy Kaplan and CBRE’s Will Pike explore why this resilient, tax-efficient investment strategy is gaining favor.

• Attractive in volatile markets: Positioned as a hybrid asset class—part real estate and part structured finance, net lease investments offer cash flow backed by quality credit tenants.
• Manufacturing momentum: Production facilities are emerging as high-performing assets due to their strong cash flow and tenant investment in infrastructure.
• Sale-leasebacks as strategic tools: Investors and corporate occupiers are increasingly using sale-leasebacks to unlock capital, especially in sectors where considerable capital is tied up in operating assets.

· Capital market resilience: Despite macroeconomic headwinds, net lease is attracting institutional capital, with growing interest from large institutions and wealth management channels.

· Risk-adjusted returns and geographic nuance: Cap rates and valuations vary significantly by location and tenant credit quality, underscoring the importance of underwriting both real estate fundamentals and corporate financial health.