Single-Tenant Net Lease Deals Soared 26% in Q1

Hey, If you have not received an email in a while, as a reminder you signed up on Zero Flux - A daily newsletter with 5-10 actionable real estate trends.

Unsubscribe below if you would like to stop receiving future emails

"You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life."

― Steve Jobs

Single-Tenant Net Lease Deals Soared 26% in Q1 link

• The single-tenant net lease market saw a significant jump in Q1 2024, with investment sales rising 26% from the previous quarter to $11.2 billion. This rise occurred despite a slight year-on-year decrease of 4.5%.

• Average capitalization rates for the net lease sector reached 6.50%, the highest since mid-2015. The increase of 20 basis points in Q1 indicates a tightening of yields in response to the market's growth trajectory.

March 2024 Rental Report: Median Asking Rents Continue To Decline link

• March 2024 marks the eighth consecutive year-over-year decline in median asking rents for 0-2 bedroom properties, dipping by 0.3%.

• The current median asking rent in the largest U.S. metros stands at $1,722, slightly up by $14 from the previous month but down by $36 from its peak in August 2022.

• The West saw its first rent increase in over a year, with San Diego and Los Angeles leading the recovery. Meanwhile, rents in the Midwest remain stable, matching the levels from last year.

• Rising shelter costs have been a significant factor driving inflation. Stabilizing rents could complicate the Federal Reserve's policy decisions, highlighting the need for more housing construction to address shortages and control rising costs.

New here? Join the newsletter (it's free).

Lowest Homeownership Rate for Younger Householders in 2 Years link

• Homeownership in the U.S. dropped to 65.6% in early 2024, marking a slight decline from the previous quarter and the lowest in two years. The average rate over the past 25 years was higher at 66.4%, indicating a tough market.

• Younger householders under 35 are particularly hard hit, with homeownership plummeting to 37.7% due to high mortgage rates and limited affordable housing. This demographic has seen the largest fall in homeownership rates among all age groups.

• Despite a stable national rental vacancy rate of 6.6%, homeowner vacancies are near historical lows at 0.8%. This reflects a tight housing market where fewer homes are available for sale.

The Gen-Z Advantage in Housing link

A study suggests that Gen Z has it better in the housing market than the millennials who came before them.

• Gen Z-ers are projected to spend $145,000 on rent by age 30, compared to $127,000 spent by millennials. Both generations spend about 27% of their income on rent.

• Homeownership is pricier for millennials; they spent $172,000 by age 30, dedicating 36% of their income, whereas Gen Z can expect to spend $165,000, using up 30% of their income.

• San Jose is the most expensive metro for both renting and buying for Gen Z. Renting in San Jose could save Gen Z $170,000 over eight years compared to buying.

• Coastal cities dominate the list of the most expensive areas, showing a clear financial advantage in renting over buying in these high-cost markets.

Here’s How Much Home Insurance Rates Have Risen in Every State

Top 5 Universities for Student Housing Construction

Here’s Where BTR Is Blooming. Top 20 hotspots for deliveries and construction

The Top U.S. Cities Immune to the Housing Market Malaise—Where Price Growth Is Surging 

The Best U.S. Companies to Work for According to LinkedIn

That's all, folks.

Cheers,

Vidit

P.S - Read past newsletters here