The Long Run: What’s Driving Net Lease Investment

Net lease assets are attracting more institutional capital. New Mountain Capital’s Teddy Kaplan and CBRE’s Will Pike explore why this resilient, tax-efficient investment strategy is gaining favor.Attractive in volatile markets: Positioned as a hybrid asset class—part real estate and part structured finance, net lease investments offer cash flow backed by quality credit tenants.Manufacturing momentum: Production facilities are emerging as high-performing assets due to their strong cash flow and tenant investment in infrastructure.Sale-leasebacks as strategic tools: Investors and corporate occupiers are increasingly using sale-leasebacks to unlock capital, especially in sectors where considerable capital is tied up in operating assets.·      Capital market resilience: Despite macroeconomic headwinds, net lease is attracting institutional capital, with growing interest from large institutions and wealth management channels.·      Risk-adjusted returns and geographic nuance: Cap rates and valuations vary significantly by location and tenant credit quality, underscoring the importance of underwriting both real estate fundamentals and corporate financial health.