In response to the spontaneous arrival of COVID-19, many investors took the wait-and-see approach to understand the virus’s full effect on commercial real estate. We have seen the impact on different net lease tenants, distinguishing those that can survive a downturn. Among those include tenants such as supermarkets, drugstores, office, and pet supply stores. Those struggling include apparel retail stores, big-box retailers, gyms and fitness studios, casual dining restaurants, beauty salons, and movie theaters. The following article dives into the net lease subtypes that are performing well during these market changes.
Investors are taking this time to monitor the activity of net lease assets to see which can easily adapt to change. While referring to past recessions may provide insight on a business’s performance, that doesn’t guarantee it will repeat this cycle. So long as the business offers essential products and services, and the lease structure is long-term, net lease properties can weather any economic downturn. For more information, please contact a Matthews™ specialized agent today.