While sales volume changes, investor preferences didn't. Dollar stores accounted for 31% of all transactions, which was a 9% increase from April. 

"Obviously, velocity slowed down, but the interest is really concentrated in the dollar stores, drug stores and fast-food restaurants, which still have the drive-throughs that people were able to purchase food from," Pappas says.

Quick service restaurants took 27% of sales velocity, which was a two percent increase from April. Pharmacies accounted for 15% of all transactions, which was down one percent from April. 

"Drug stores, which for the longest period had really been the gold standard for net lease assets because of great real estate and corporate guarantees, are doing well because people know that they're continuing to pay their rent," Pappas says. 

One the other hand, Pappas reported that only two casual dining restaurants traded in May. "Fast food or the fast-casual restaurants, like Applebee's and TGI Fridays, had to close down entirely," Pappas says. 

The South led the way in net lease sales for the second straight month but saw its overall share of the market decline from 37% to 27%. "In the South, the state governments are generally more pro-growth, so more net lease investors see upside there," Pappas says. "It has been attracting more 1031 [exchange] capital."

While the South still led the way, Florida's sales volume fell off a cliff in May. In April, the Sunshine State had 31 trades for $112.7 million. In May, it only had ten sales for $18.7 million. California ($63.6 million), Texas ($47.8 million) and Alabama ($31.6 million) all posted more dollar volume than Florida in May. 

"Even though lower cap rates in Florida discourage a subset of buyers, demand for Florida net lease assets remained strong prior to the pandemic [we even sold a Wawa in Melbourne for full price in March]," Pappas says. "The sharp decline in Florida activity was very surprising."