- Net-lease investment volume reached $9.6B in Q1 2025, a 9% quarterly increase and 21% year-over-year jump.
- Retail and industrial & logistics sectors led growth, with industrial investment up 46% and retail up 25% year-over-year.
- Private investors remained the largest buyer group, contributing $4.4B in Q1 activity.
- Cap rates rose across all sectors, with retail seeing the sharpest year-over-year increase at 60 basis points.
Steady Momentum in 2025
The net-lease sector continued its recovery in early 2025. According to Globe St, total investment reached $9.6B in the first quarter. These assets remain attractive due to their stability and risk-adjusted returns.
Unlike traditional leases, net-lease agreements shift expenses—like taxes and maintenance—to the tenant. This structure appeals to investors seeking lower-risk options.
Sector Breakdown
Industrial and logistics assets led Q1 activity. They totaled $4.7B and accounted for 49% of net-lease investment. Compared to last year, this marked a 46% jump.
Retail was also strong. It rose 11% from Q4 2024 and 25% from Q1 last year, totaling $3.1B. Office assets, however, continued to lag. They fell to $1.8B and made up just 19% of the market—down from 29% a year ago.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Who’s Investing?
Private investors led the charge. They invested $4.4B, up 13% year-over-year. Institutional buyers and equity funds followed with $2.5B. This was a 22% increase from last year and a 17% rise from Q4.
However, REITs scaled back. Their net-lease investment fell 16% from last year, totaling $529M.
Global Capital Trends
Cross-border investment reached $774M in Q1 2025. That’s down 8% from a year ago and now accounts for 11.6% of total volume.
Even so, cross-border activity surged 94.1% for the year ending Q1. Buyers from the U.K., Canada, Japan, Singapore, and Spain made up 90% of the total.
Cap Rates Edge Upward
Average net-lease cap rates rose to 7% in Q1. This marked a 7-basis-point increase from the previous quarter and a 48-point jump year-over-year.
Retail saw the largest cap rate hike, up 60 bps annually. Office rose by 43 bps, while industrial increased by 14 bps.
Why It Matters
Despite economic uncertainty, net-lease assets remain a safe bet. They offer reliable returns and less exposure to operating costs. For this reason, investors are shifting toward these lower-risk options.
Looking ahead, industrial and retail segments are expected to stay strong. Their performance in Q1 reinforces growing investor confidence in the sector.
