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Large Deals Drive Modest Increase In Office, Industrial Net Lease Sales

Net lease sales volumes remained stable in the first half of 2017.

Despite a decline in the number of deals that have closed compared to the same period in 2016, the size of these transactions — more than a handful of which were $250M and up — have driven modest increases in office and industrial assets this year, JLL reports


While deal count is down 18.7%, net lease sales volumes have jumped an average of 4.7% since last year.

Still the weak link in the industry right now, the retail sector did not experience positive gains during the first half. Limited opportunities have led to a decline in activity among private investors, who dominate the net lease sales market

The average net lease cap rate for the office sector came in at 6.5%, industrial at 6.4% and retail at 5.7%, showing a 6% average cap rate overall.

According to the report, primary markets have also softened this year because of changing pricing dynamics, which are forcing investors to look to tertiary opportunities instead.

Analysts remain optimistic about the future, anticipating steady sales and healthy pipelines, as well as robust activity driven by capital demand to continue into next year.