Individuals, 1031 Exchange Buyers Have Deeper Pockets Today

For years, larger price point retail property listings ($10M+) were primarily the domain of institutional investors, REITs and big funds. Today, however, that dynamic has changed as private high net worth individuals have significantly more money to place into commercial real estate transactions than they have historically. 

Whether the buyer is motivated by the security that a net-leased property provides or they are tax-motivated due to a large 1031 exchange, private buyers have been increasingly competitive on listings that would traditionally have been sold to institutional investors.

Several factors have contributed to this shift. Property values have appreciated substantially over the past decade, creating larger liquidity events when private investors sell. At the same time, many individuals and family offices have built sizable generational commercial real estate portfolios. They may choose to pursue the passivity that net-leased properties and multi-tenant retail provide versus other more management-intensive properties. The broader “K-shaped” economy has reinforced this trend of a widening wealth gap, enabling the wealthiest households to compound capital at a faster rate and those individuals are increasingly deploying capital into larger commercial real estate transactions.

This has had a meaningful impact on the net-leased and multi-tenant retail property market as private buyers are generally more aggressive on pricing than institutional investors. As private capital has moved further up the price spectrum, it has created additional competition for high-quality assets, leading to cap rate compression for larger properties over the past five years. 

A REIT or fund typically has a defined return thresholds due to its cost of capital, along with investment committee requirements and portfolio allocation constraints that a private investor does not have, especially if they are “all-cash.” Private investors at this scale are also heavily influenced by depreciation benefits or the implications of a 1031 exchange where they need to place capital into other properties to defer capital gains taxes. This will generally lead them to “paying up” versus the alternative of paying a sizeable tax bill today. 

Cap rate compression

As private capital has moved further up the price spectrum, it has created additional competition for high-quality assets, which has led to cap rate compression for larger properties over the past five years.

We have seen numerous examples of this trend in 2026 alone. Recent transactions we have facilitated to private buyers include a freestanding EoS Fitness for $14.3 million, a Sprouts-anchored shopping center for approximately $41.3 million, a CVS for roughly $10 million and a freestanding Sprouts for $14.8 million. In another example, the same private buyer is under contract to purchase two single-tenant Chick-fil-A assets in Florida for approximately $9 million each. The majority of Publix-anchored shopping center sales over the past few years have sold to private buyers or Publix exercised their ROFR as a result of a private offer.

REITs, funds and other institutional investors remain an essential part of the net lease buyer pool, bringing significant capital, transaction experience and the ability to execute efficiently across a wide range of asset types and price points. They continue to be among the most active and reliable buyers in the market, but increasingly they are competing alongside private investors with substantial liquidity and flexibility. The result is a deeper and more competitive buyer pool for larger net lease assets, benefiting sellers while creating more overlap than ever between private and institutional capital. In today’s market, maximizing value means creating competition across both groups when selling an asset.

Will Wamble is executive vice president & principal at SRS Real Estate Partners.

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