According to Green Street’s latest report on the net lease sector, acquisition volumes among REITs decreased slightly in Q3 of 2024 due to volatile costs of capital. Compared to Q3 of 2023 and the same period two years ago, transaction volume was down by 45% and 50%, respectively.
While there was an average gross asset value premium of 13% in Q3, up from the previous quarter’s average of only 6%, this increase was largely driven by two publicly traded REITs with outsized GAV premiums. As a result, most REITs are following their weaker-than-normal cost-of-equity signals and acquiring fewer properties.
Looking ahead, Green Street predicts that most net lease REITs will see a significant increase in transaction volumes during Q4 of this year and into early next year. This is supported by Essential Properties Realty Trust’s recent acquisition activity as seen with its purchase of a Cooper’s Hawk Winery & Restaurant property (pictured above).
