{"id":1004586969,"date":"2022-12-30T01:35:00","date_gmt":"2022-12-30T09:35:00","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004586969"},"modified":"2025-11-26T12:34:19","modified_gmt":"2025-11-26T20:34:19","slug":"2022-net-lease-overall-sales-volume-and-cap-rates","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/2022-net-lease-overall-sales-volume-and-cap-rates\/","title":{"rendered":"2022 Net Lease Overall Sales Volume and Cap Rates"},"content":{"rendered":"
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Source: Stan Johnson Co. Research, Real Capital Analytics<\/p><\/div>\n

With an absence of new, shocking headlines to begin the second half of 2022, the commercial real estate market continues to face the same external influences that will undoubtedly impact how we end the year. The economic picture remains murky, with inflation and rising interest rates at the forefront of consumers\u2019 and investors\u2019 minds. Fears of a recession still loom, and there has been a noticeable decrease in consumer confidence this year. Additionally, the industry continues to question the future of 1031 exchanges, and the mid-term elections could impact economic conditions and investor sentiment as well. These trends, however, have been balanced by strong job growth, low unemployment, robust consumer spending, and insatiable investor demand for quality assets.<\/p>\n

In the single-tenant net lease market, we\u2019ve seen investment sales volume decline over the past three quarters and compared to the record-setting end to last year, current activity levels may feel somewhat lackluster. Put in perspective though, the market is on pace to have a very solid year, perhaps topping the $70-billion-mark and solidifying 2022 as a top three year in history. However, fourth quarter will be telling. The final three months of the year will not only dictate how 2022 gets logged in the history books, but it will also set the tone for 2023.<\/p>\n

John Tagg is the Research Manager at Northmarq. He is responsible for coordinating the production and distribution of research reports that support the company\u2019s commercial real estate brokerage and investment sales teams across local offices nationwide.<\/em><\/p>\n

\u2014Posted on Dec. 30, 2022<\/p>\n

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Source: Stan Johnson Co. Research, Real Capital Analytics<\/p><\/div>\n

On the s-curve that is the cyclical commercial real estate market, second quarter 2022\u2019s performance suggests that we\u2019ve passed the peak of the market, especially within the single-tenant net lease sector. With rising interest rates and rampant inflation, net lease investors have been watching the market very closely, keeping note of the following measures.<\/p>\n

First, cap rates continue to compress, but this could be the last quarter before we start to see a reversal of that trend. Deals being priced today will influence closing cap rates reported for third quarter 2022 and beyond, so investors must keep in mind the lagging nature of this statistic.<\/p>\n

Next, sales volume is another important indicator of where we are in the market cycle. It\u2019s almost certain that we\u2019ll look back and identify fourth quarter 2021 as the true peak of this cycle. Sales totals across the net lease market were astonishingly high, surpassing $103 billion. Within the individual property sectors, the end of last year saw activity, especially for industrial and retail, reach levels that seem nearly impossible to achieve again. While every record-setting quarter makes us question its repeatability, sales volume during the first half of 2022 was closer to normal or average levels, and we\u2019re likely to see more of that in the foreseeable future, pending a major market event.<\/p>\n

Despite what might feel like a slow-down in market momentum, buyer demand is still incredibly high. Investors are actively seeking high quality and value-add deals, understanding that even though interest rates are rising, debt is still comparatively inexpensive. This will continue to create opportunities for investors, and there is still time for sellers to take advantage.<\/p>\n

It\u2019s important to note that even once the market has passed its peak, we are still in positive territory. It remains to be seen how long we\u2019ll stay here, but for now, there\u2019s still a lot to be encouraged about. Yes, the U.S. economy has contracted for two consecutive quarters and consumer confidence has declined sharply in recent months. But on the other hand, unemployment is incredibly low and consumer spending remains high \u2013 two very important indicators of economic health. Opportunities abound across the commercial real estate industry, and investors should be able to continue transacting with confidence in the coming months and quarters despite the beginnings of a shifting market.<\/p>\n

\u2014Posted on Oct. 24, 2022<\/p>\n

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Source: Stan Johnson Co. Research, Real Capital Analytics<\/p><\/div>\n

Following a record-setting 2021 with unprecedented levels of investment sales activity in the final quarter of the year, there was no expectation that the single-tenant net lease market was positioned for back-to-back quarters of such volume. Instead, predictions called for just enough carried momentum to position the market well enough to have a respectable follow-up year. Despite current headwinds\u2013with inflation raging and interest rates rising\u2013the market delivered on those predictions for the most part. It is highly unlikely and perhaps even impossible that we\u2019ll see 2022\u2019s activity reach or surpass the nearly $103 billion reported last year, but we had a healthy start. Overall, the net lease market reported approximately $21.7 billion in sales volume during first quarter 2022. While it\u2019s a decrease of about 50 percent quarter-to-quarter, this was a very strong showing of above average quarterly volume which points to continued buyer demand.<\/p>\n

By sector, the industrial net lease market continued to drive the bulk of investment activity, contributing $11.4 billion, or more than half of the quarter\u2019s overall single-tenant net lease total. The office sector, powered by Google\u2019s high-profile purchase of a single-asset Manhattan office building for a reported $1.9 billion, logged nearly $6.9 billion in total. Even without the Google transaction, the single-tenant office sector would have come close to meeting its historic average, indicating investor confidence has rebounded from the height of the pandemic when the future of office use was much more uncertain.<\/p>\n

\u2014Posted on Jun. 22, 2022<\/p>\n","protected":false},"excerpt":{"rendered":"

Below are a few of the top trends impacting the market, according to Northmarq.<\/p>\n","protected":false},"author":3889,"featured_media":1004638054,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37765,37768],"tags":[50380],"class_list":["post-1004586969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rc-cap-rates","category-rc-volume","tag-northmarq"],"acf":[],"yoast_head":"\n2022 Net Lease Overall Sales Volume and Cap Rates - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/2022-net-lease-overall-sales-volume-and-cap-rates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2022 Net Lease Overall Sales Volume and Cap Rates\" \/>\n<meta property=\"og:description\" content=\"Below are a few of the top trends impacting the market, according to Northmarq.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/2022-net-lease-overall-sales-volume-and-cap-rates\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2022-12-30T09:35:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-11-26T20:34:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/10\/0123_CPE_Invest_Single.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"279\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"John Tagg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/2022-net-lease-overall-sales-volume-and-cap-rates\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/2022-net-lease-overall-sales-volume-and-cap-rates\/\",\"name\":\"2022 Net Lease Overall Sales Volume and Cap Rates - 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