For all intents, net lease transactions had a banner quarter in the first part of this year, according to CBRE stats. Net-lease investment volume totalled $14.3 billion for the first quarter, a 2.6% year over year drop that prompted CBRE to say the sector was close to its pre-pandemic performance. For commercial real estate as a whole, by comparison, volume was down 18.3% in Q1 2021, according to Real Capital Analytics. 

But those numbers don't tell the whole story for the asset class. They don't tell of the difficulty new entrants in the market are having sourcing transactions because it is so competitive. Or that pricing is far tighter than many investors would like. Or the huge amount of money chasing what is ultimately a finite number of deals. Those numbers don't say what some experts are thinking, namely that the net lease market may be on the verge of entering frothy territory.

"The market is extremely competitive and cap rates are at historic lows right now," says Josh Lewis, senior vice president of Acquisitions at National Retail Properties and a participant in the GlobeSt. NET LEASE Conference being held this week in New York. "There is more capital chasing deals than at any other time that I can remember. There is just a real frothiness to the market."