How to Uncover and Close Off-Market Net Lease Deals

The single-tenant net lease sector does not lack inventory. In the third quarter of 2026, the number of net lease properties available for sale was nearly 5,800. However, less than 10 percent of available retail properties meet the standard most investors prioritize: investment-grade credit and a long-term lease. For buyers with defined acquisition criteria, the right property is frequently one that is not for sale.

Most investors begin their search by reviewing available listings, which limits the opportunity set to owners who have already decided to sell. Many owners of well-located, credit-tenant properties have not made that decision but will consider an offer that meets their objectives. Since 2022, rising cap rates have eroded the gains many owners expected to realize on a sale, and a large number elected to hold rather than market their properties. Accordingly, a meaningful share of the highest-quality net lease assets sits outside the market.

An off-market strategy begins with specific acquisition criteria (specific tenants or industry, remaining lease term, rent increases, geography, price range and underlying real estate quality). Establishing those requirements before approaching owners gives the search direction and reduces time spent on properties the buyer is unlikely to acquire. A buyer seeking a particular tenant in a specific metropolitan area will often find only two properties listed for sale, while dozens of additional locations meet the same requirements. That broader group becomes the target list. The work then involves verifying the lease details, identifying the decision maker and determining whether the owner has a reason to consider a sale.

A property’s suitability reveals little about its availability, which makes understanding the ownership equally important. Length of ownership is a useful starting point. An investor that acquired a property 15 or 20 years ago typically has substantial equity and different objectives today, including estate planning, diversification or simplifying the portfolio. However, a long hold period also tends to come with a low tax basis, which can make an owner hesitant to sell without a clear plan for the proceeds.

Lease events often create more immediate motivation. An owner that recently secured an extension can sell with a longer income stream in place, and the market rewards said extension. For example, in the third quarter, QSR properties with 16 to 20 years of remaining term were priced below a 6 percent cap rate, compared with the mid-7 percent or higher for leases with less than five years remaining.

Debt maturities are another catalyst. According to the Mortgage Bankers Association, $875 billion of commercial and multifamily mortgages, approximately 17 percent of outstanding balances, mature in 2026. Many net lease owners financed their properties when borrowing costs were well below current levels and now must choose among refinancing at a higher rate, contributing additional equity or selling. With the Federal Reserve removing its expected 2026 rate cut, fewer owners can afford to wait for relief. A maturity does not guarantee a seller, but it gives a buyer a timely reason to start a conversation.

Activity elsewhere in an owner’s portfolio also provides insight. An ownership group selling several properties, reducing exposure to a tenant or exiting a market will often consider additional dispositions. In these cases, nothing about the individual property suggests it is available. The motivation comes from the owner’s broader investment strategy.

These indicators help prioritize outreach, but only a direct conversation determines where an owner stands. Some owners have no intention of selling. Others will review an offer but have little interest in a formal marketing process, and some are already planning a disposition for the following year. As a result, off-market sourcing is an ongoing effort.

Buyer quality matters

Buyer credibility determines whether those conversations lead to a transaction. An owner who has not committed to selling will have little patience for uncertain financing, an extended diligence period or an attempt to offer a price substantially below market value. Clearly defined criteria, available equity, reasonable pricing expectations and a record of completing acquisitions establish that credibility. Flexibility on timing also matters. Many owners will accept a fair price in exchange for certainty of execution and a closing schedule that accommodates their other investment or personal plans.

Buyers should also be realistic about pricing since off-market access does not entitle them to a discount. For the highest-quality assets, such as McDonald’s and Chick-fil-A ground leases priced as low as 4.00 percent in the third quarter, the opportunity is to buy at a fair price before a broad marketing process introduces additional competition. A buyer with narrow acquisition requirements will place considerable value on that access. Regardless of how it is sourced, an off-market property warrants the same scrutiny of credit, lease terms, rent, location and residual value as any marketed acquisition.

Technology supports much of this work. Property databases, ownership records and transaction histories make it easier to assemble target lists and follow portfolio activity. However, a database cannot establish whether the owner wants to sell, what terms would be acceptable or whether a particular buyer can complete the transaction. Those questions require direct relationships, market knowledge and judgment.

With overall supply rising while high-quality inventory remains scarce, competition for the best net lease assets will increasingly take place before properties reach the market. Debt maturities and lease events through the remainder of 2026 will lead more owners to reevaluate their holdings. Investors who combine defined criteria, consistent outreach and certainty of execution will be best positioned to acquire the assets that never appear on a listing service.

Randy Blankstein is president of net lease advisory firm The Boulder Group.