The latest research from CBRE shows U.S. net-lease investment in 2019 is on pace to surpass last year’s record level, with northern New Jersey among the leading target markets for investors.
Northern New Jersey was ranked eighth out of the 20 top markets in the nation for net-lease investment in the third quarter of 2019 with a total volume of $607 million — up 44.2 percent year over year. For the year-ending Q3 2019, net-lease investment totaled $1.96 billion—up 40.1 percent year over year.
“Northern Jersey continues to attract investors looking for high-growth opportunities, specifically in the industrial property segment,” said Jeremy Neuer, executive vice president, CBRE. “We expect the net-lease sector to maintain its expansion, as more local and foreign investors focus their attention on the region, where cap rates are predicted to remain steady through Q4 2019.”
Moreover, investors are increasingly focused on net-lease investment opportunities in high-growth secondary markets such as northern New Jersey, with these markets seeing strong investment volume growth year over year.
CBRE data also found that total net-lease investment in the U.S. – comprising office, industrial and retail properties – increased by 30.2 percent year over year to $20.9 billion in Q3 2019—the third-highest quarterly total on record.
Investment volume in Q3 2019 was driven by a 48.5 percent year-over-year gain for the industrial sector and a 22.1 percent gain for the office sector, with the retail sector increasing by 8.8 percent nationally.
Net-lease investment volume nationally, year to date through Q3 2019, climbed 24 percent year over year to $55.2 billion and outpaced the broader commercial real estate market.
The net-lease share of total commercial real estate investment stood at 14.6 percent in Q3 2019, one of the highest quarterly shares of this cycle and higher than the 11 percent to 13 percent range held since 2012. This suggests sustained investor demand for net-lease assets that will see full-year volume surpass 2018’s record total of $69.6 billion.