Middle Market Digest-The Midwest

BY THE NUMBERS

CHICAGO—The US net lease market saw some momentum in the third quarter, with historic single-asset sales, increased sale leasebacks and expanding foreign investments, according to a new report from JLL. The Chicago-based company found that after increased financial market volatility in the first half of the year, the quality of assets brought to market and closed within the third quarter increased.  There has been year-to-date $31.3 billion in investment sales with an average cap rate of 6.2%. The office sector accounted for $15.8 billion and had an average cap rate of 6.8%. Industrial purchases totaled $8.4 billion with an average rate of 6.3%. And retail came in at $7.1 billion with a rate of 5.6%. “As a result of enhanced product availability, buyers have increased their interest in net lease assets,” the firm says. “Cap rate movement varies across sectors and markets following these changes, remaining flat for office assets and compressing further for industrial and retail. Investor diversification continues as pricing creates challenges in identifying accretive acquisitions for certain buyers, notably in primary markets.”