As inflationary pressures continue to mount and high interest rates persist, deal flow in the net lease space has slowed considerably, leaving inventory in flux as would-be sellers stay on the sidelines. 

"The transaction volume in the past year and a half has fallen off the cliff," said Catherine Tenney, principal at The Carlyle Group, in a panel on the state of net lease capital markets at this year's GlobeSt Net Lease Fall 2023 conference in Los Angeles. "But that's part of the brilliance of net lease, frankly. We have a stable of performing assets, so we have cash flow. It's not like in the debt markets where you have to constantly replace your loans as they get paid off. We have the stability of a portfolio of performing assets so we can sit and watch and wait for the opportunities."

In a state of the industry panel earlier in the day, Gordon Whiting, managing director at Angelo Gordon, said investors are looking for stable returns in the current environment.