In the evolving landscape of net lease investment, the growth of United Rentals, Sunbelt Rentals, and Herc Rentals marks a pivotal trend in the triple net (NNN) lease sector, highlighting the convergence of industrial utility with retail-like accessibility. These companies are central to the equipment rental industry, and they are redefining traditional NNN product by embodying characteristics of both sectors. With the lines between retail and industrial blurred, this offers investors new pathways to explore value in an otherwise segmented market.

Expansion by these companies mirrors the broader surge of the construction equipment rental market, which is projected to grow at a compound annual growth rate of 6.12% from 2023 to 2030. Driving this growth is increased government infrastructure spending and a shift toward renting equipment due to rising costs of new machinery. Holding about 34% of the U.S. market for equipment rentals, these companies highlight the sector's nearly 60% growth over the past decade.

Retail Sector Volatility and Cap Rate Increases