Today, net-leased property occupied by a single tenant which is not an investment-grade credit is attracting a national investor audience.
This is primarily because of:
The pervasive use of the Internet
Attractive investment yields (cap. rates) compared to core real estate and other security investments
Industrial properties valued under $20 million and as low as $1 million are no longer a “local” deal.
Investors view the sale-leaseback as more attractive than a “junk bond” of equivalent yield, because they have real estate collateral supporting their investment. If a company fails, its bonds are worth $0. In a sale-leaseback structure, however, if the company fails, its underlying real estate will always have value.