“We’re seeing investors begin to explore non-investment grade credit-tenants, and short term assets, as a source for higher yields,” Waszak tells GlobeSt.com. These include tenants such as Taco Bell, Wendy’s, Applebee’s and Chili’s, that have franchisee guaranteed leases instead of corporately guaranteed leases.

Randy Blankstein, president at Boulder, tells GlobeSt.com that it’s getting tougher to find the right kind of net-lease deal. “Through 2011, the backlog hadn’t been sold,” he says. “The flight to safety and the backfilling continues.”

For example, about two-thirds of the former Border’s Books locations have already been re-tenanted. This fill-up happened because of the lack of new supply on the market, in contrast to when the glut of tenants such as Circuit City left the market at the start of the recession.

Blankstein agrees that tenants such as Dollar General, FedEx, McDonald’s and Advance Auto Parts are seeing compression due to high investment grade ratings and quality long-term lease structures. The majority of net lease participants expect the compression to continue in the second half, he says. “Whether it’s a good market today depends on your stake,” Blankstein says. “If you’re out of the bond market looking for higher yield, net-lease is a good investment, but a developer looking at a McDonald’s purchase today may think there’s better options elsewhere. There’s certainly net-lease opportunity in the second-tier properties and markets, but there’s just not a deep pool of investors looking for those kinds of deals.”