Ample liquidity remains in the US net lease market despite easing momentum in the second half of last quarter, with what analysts at JLL are calling "real-time pricing discovery" underway leading into the second half of the year.
Deals are repricing versus peak values, with further pressure expected as rate hikes continue. Market participants are contending with the impacts of inflation and the Fed's response and while initially re-pricing was debt-driven, a broader assessment of risk is now afoot. The average cap rate for the office sector was 6.3%, a 20 bps change year-over-year, while industrial clocked in at 5.6% (up 10 bps), and retail was 5.8% (down 20 bps year-over-year).
Excluding entity-level deals, Q2 single tenant volume was off 20% from a record first quarter, according to JLL and Real Capital Analytics data.
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