Just a few years ago, retail, industrial, and office properties with single tenants responsible for taxes, insurance, and maintenance were highly favored by buyers for their financial stability. However, this property type is now experiencing weaker demand, partly due to higher borrowing costs.
In the first quarter of 2024, transaction volume for single-tenant, net-leased properties totaled $1.3 billion, marking the lowest quarterly figure in 14 years. This is significantly lower than the recent peak of $11.1 billion in the first quarter of 2022, according to CoStar data.
The slowdown can be attributed to various factors, including a pessimistic investment outlook, increased interest expenses, and a reluctance to sell amidst declining prices, as stated by Boulder Group, a Chicago-based real estate services firm specializing in net-leased properties.
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