The single-tenant net lease market registered its strongest quarter of investment sales activity in history during the final three months of 2021, outpacing the previous high-water mark by more than 46%, Stan Johnson Company (SJC) reported. Fourth-quarter 2021 saw $36.3 billion in sales, which drove annual totals north of $96.5 billion and set a new annual sales record for the single-tenant sector.
Year-over-year, single-tenant net lease sales volume was up 49%, according to SJC. The annual total was 19% higher than the previous record set in 2019.
“Along with other factors, the lack of available supply has impacted cap rates across the industry,” according to SJC. Net lease industrial and retail cap rates compressed quarter-to-quarter as well as Y-O-Y. Only the net lease office sector reported higher year-over-year cap rates, ending 2021 at 6.27%, “although a four-basis-point increase is hardly noteworthy.”