Randy Blankstein, president of the Boulder Group in Wilmette, Illinois, in an interview with Midwest Real Estate News earlier this year referred to higher interest rates as a possible wrench in the net lease market, something that could slow this commercial sector’s long-building momentum.
And it’s true that interest rates were a big topic of conversation during the 8th annual National Net Lease Summit held by REjournals and Midwest Real Estate News July 28 at the University Club of Chicago. But the speakers during this event — and they included the biggest and most successful players in this space — all agreed, too, that the net lease market remains a resilient one, one capable of fighting through the country’s current economic uncertainties.
As Blankstein said during his early summer interview with Midwest Real Estate News, demand remains high for net lease assets. That demand is strong enough that it is so far overcoming the challenges of higher interest rates. Speakers during the summit agreed: Net lease assets are so attractive, demand is not yet waning.
Optimism, then, ruled the day during the summit. Speakers focused on the strength of such net lease products as drug stores, fast-casual restaurants with drive-thru lanes, dollar stores and auto-supply stores. They also pointed out the seemingly endless demand for industrial real estate.
It was a day filled with positive messages. And the biggest? Yes, rising interest rates are a challenge and could scuttle some net lease deals. But this sector remains resilient. And investors still love this asset class.
Industrial and healthcare real estate remain in high demand from investors. Speaking about the seemingly unquenchable demand for these product types were Industrial and Healthcare Net Lease panel participants Chad Firsel, moderator, Quantum Real Estate Advisors; Tivon Moffitt, Institutional Property Advisors; Robert Vanecko, Brennan Investment Group; and Gino Lollio, Cushman & Wakefield.