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    How Net-Leased Commercial Real Estate Is Making Waves

    Net-lease commercial real estate has been rising in recent years, and 2021 was no exception. The total transaction volume for net-lease assets reached $79.3 billion, up 39% from the previous years. This unprecedented demand is being driven by investors looking for stable and predictable income streams.

    Of course, with any investment, there are risks to consider. But for savvy investors, the potential rewards of investing in net-lease commercial real estate outweigh the risks. Here’s a closer look at this growing trend and why you should consider adding net-lease commercial real estate to your portfolio.

    What This Means for Investors

    The high demand for net-leased assets and a scarcity of supply are driving up prices and lowering capitalization rates. With that being said, it’s still a good time to invest in real estate, here are some reasons why:

    Higher Primary Yields

    Net lease investments offer primary yields that are significantly higher than other types of assets, such as bonds. For example, the average yield on a 10-year Treasury bond is 2.61%. In contrast, the average yield on a net-lease property is between 5% and 8%. This higher yield is because net-lease properties are leased to tenants long-term, typically 10 to 20 years.

    Steady Income with Relatively Low-Risk

    Net-lease commercial real estate typically features long-term leases with creditworthy tenants. This means that you can count on a steady stream of rental income for the life of the lease. And because the tenant is responsible for property taxes, insurance, and maintenance in a triple-net lease, you don’t have to worry about unexpected expenses.

    Resilience to Industry Volatility

    Another benefit of investing in net-lease commercial real estate is that it’s relatively immune to industry volatility. For example, if you own a property leased to a grocery store, you don’t have to worry about the ebb and flow of the stock market. People will always need to eat, so your tenant will likely stay put even during tough economic times.

    Versatility to Supplement All Types of Investor Portfolio

    Net lease commercial real estate also has the potential to complement any type of investor portfolio. For instance, if you’re looking for a hedge against inflation, net lease commercial real estate can provide it through price appreciation and rental income increases.

    Or, if you’re looking for a way to diversify your portfolio, net lease commercial real estate can help with that, too. By adding real estate to your portfolio, you’re diversifying away from stocks and bonds and into a physical asset that can offer stable income and potential price appreciation.

    For these reasons and others, net lease commercial real estate makes a good investment. This is because the market is expected to continue to grow through 2022 and beyond, and the potential rewards seem to outweigh the risks. However, as with any investment, it is essential to do your research and consult with experts like Brisky Net Lease for advice before making any decisions.

    Contact Brisky Net Lease

    Brisky Net Lease is a commercial real estate brokerage firm specializing in net lease properties. We work with investors of all types, from first-time buyers to real estate investment trusts (REIT). If you’re looking to invest in triple-net lease spaces, we can help you find the right property to fit your needs.

    Contact us today to learn more.