VNQ: What Net Lease Improvements Mean For Real Estate

Net lease REITs faced headwinds as rising interest rates drove up cap rates and pressured property values, but market conditions are stabilizing. Cap rates plateaued in Q2, signaling a shift from years of increases; Federal Reserve policy hints at possible rate cuts, boosting investor sentiment. Transaction activity is accelerating, with a flight to quality and tightening spreads, suggesting renewed appetite for net lease assets.