Blankstein says there has been a decline in store size in the auto parts sector. In the past, stores would have retail in the front a large amount of storage in the back. "Now it's more of just in time [delivery] where stuff just comes to the store as it's needed," Blankstein says. "They can send parts from more central places versus taking up half of the store [with storage]. Plus, auto parts is not a newer sector, meaning a lot of the folks had already built out most places."

In the report, Boulder covers Advance Auto Parts, AutoZone and O'Reilly Auto Parts because they account for the highest percentage of single-tenant transactions of properties occupied by auto parts retailers.

As cap rates rose, transaction volume increased in the net lease auto parts sector, rising 6% in 2019. Boulder says the low absolute price point of properties within the space makes these investments attractive to investors.

If investors are looking for investment-grade corporate leases under $2 million, auto parts stores are a good option, according to Blankstein. "If you're still in the $1 to $2 million range, which is the most popular range for net lease, auto parts and dollar stores are the only game in town," he says. "It's still a very vibrant sector because of that."

Boulder expects 2020 transaction volume in the auto parts sector to remain like 2019 as investors continue to look for properties with investment-grade tenants at lower price points. "However, there will be increased competition amongst new construction assets as the average remaining lease term for the sector continues to dwindle," Boulder wrote in the report. "Auto parts store properties with shorter lease terms located in areas with strong real estate fundamentals also remain in high demand among buyers seeking higher yields."