Moreover, investors are starting to feel they can afford to take a little more risk in pursuit of yield because, to a great extent, risk has been reduced in the single-tenant, net-lease marketplace. Overall, the economy is improving so tenants are more likely to renew their leases. Rents have generally increased, which means landlords aren't on renewals to the same extent that they were two or three years ago. As a result, renewal rates take much of the risk out of properties with shorter-term leases.

Rising interest rates will also lead to more demand for shorter-term transactions. Higher-yields with less spread will become more attractive. With spreads tightening, many investors can find similar cash-on-cash returns with less leverage on a shorter-term offering. Many investors are paying cash for these properties, or are coming to the bargaining table with a lender who will provide minimal debt.

Institutional investors, are in the marketplace, increasingly looking for short term remaining lease term buying programs.

Brokers in the Stan Johnson Company's Atlanta have recently been involved in several transactions of this kind. Stag Industrial, a real estate investment trust, bought a property in Statham, Ga., currently occupied by Ryder with less than three years left on the lease. Sealy & Co., an investing and operating firm, purchased a property in Alpharetta, Georgia, where FedEx has nearly five years left on its lease. -A private Chinese investor bought another FedEx leased property in Atlanta with less than three years remaining on the lease term.

The key to success, in transactions of this type, is to understand the tenant's needs thoroughly and how they translate to renewal. In addition, a potential buyer must carefully consider residual value and current market dynamics, such as market rental rates and vacancy rates.

Britton Burdette is associate director of Stan Johnson Co. The views expressed in this column are the author's own.