According to the latest research from CBRE, US net-lease investment is outpacing the broader commercial real estate market in 2019, with increasing demand for both foreign and domestic investors for office and industrial assets.

Net-lease investment - including office, industrial and retail properties - climbed 17.2% year-over-year in the first half of 2019 to $ 33.4 billion, with total sales volume growth at 13.4% over the same period.

Net-lease investment volume in Q2 2019 was the second-highest quarterly total on record at $ 20.6 billion and up by 33.8% year-over-year. Net-lease investment volume for the year-ending Q2 2019 totaled $ 74.2 billion - the highest four-quarter total since CBRE began tracking the market in 2002.

Will Pike, CBRE

"The high volume of net-lease activity has been associated with an aggressive capital markets environment coupled with an influx of capital, both foreign and domestic, seeking compelling risk-adjusted returns," said Will Pike, vice chairman of Net Lease Properties. Capital Markets at CBRE.

Net-lease investment volume in Q2 2019 was driven by gains in the office sector (65.7% year-over-year growth) and retail (52.2%), while industrial activity remained unchanged (0.6%).

Investors are highly focused on net-lease investment opportunities in high-growth secondary markets. While gateway markets like San Francisco and Boston had the largest year-over-year earnings in Q2 2019, markets such as the Inland Empire, San Diego and the East Bay made the top-10 list.

Cross-Border Net-Lease Investment

The global search for yield and portfolio diversification is attracting global investors to the US net-lease market. Cross-border capital for net-lease properties reached $ 3.9 billion in Q2 2019⁠ - a 78.4% increase from Q2 2018 and the second-highest quarterly total on record.

International buyers accounted for 18.8% of net-lease transaction volume in Q2 2019 - their highest share since 2015.

New York City, San Francisco, Miami, Houston, Los Angeles and Chicago received the most foreign capital for net-lease investment. Over the past two years, Canada, Germany and South Korea.

Foreign investment in US net-lease properties has averaged $ 8 billion annually over $ 3 billion annually between 2011 and 2014.

Source by World Property Journal.