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While net lease is one of the most durable segments in commercial real estate, the coronavirus pandemic thwarted first-quarter sales, according to Avison Young's Q1 2020 Cap Rate Report.

The net lease sector's sales activity fell from 586 deals in Q4 2019 to 416 in Q1 2020. Despite that decline, cap rates dropped seven basis points 6.58% to 6.51%. That may be partially attributable to the average lease term increasing from 10.5 years to 11.6 years.

"This finding suggests that depressed volume is caused not by a lack of investor confidence in the sector, but rather by coronavirus-related obstacles to transacting efficiently," Avison Young noted in the report. "Unavailability of debt, inability to inspect properties and difficulty negotiating in a fully remote work environment are chief among these obstacles."