Latest news with #netLease
Globe and Mail
09-07-2025
- Business
- Globe and Mail
The Boulder Group announced the release of its 2nd Quarter Net Lease Research Report
Cap Rates in Single Tenant Net Lease Stabilize Following 3 Years of Cap Rate Expansion The Boulder Group announced the release of its 2nd Quarter Net Lease Research Report today. The report features a comprehensive format with specific net lease sector information. Cap rates in the single tenant net lease sector experienced minimal changes in the second quarter of 2025, with overall cap rates increasing just one basis point to 6.79%. Retail cap rates edged up slightly to 6.57% (+1 bp), while office cap rates increased to 7.85% (+5 bps). Industrial cap rates remained unchanged at 7.23% for the second consecutive quarter. 'This modest increase in cap rates illustrates a change from the more pronounced upward trajectory experienced from 2022 to 2024,' says Randy Blankstein, President, The Boulder Group. 'This suggests the market may be stabilizing after three years of consistent cap rate increases.' The plateauing of cap rates can be best attributed to the combination of the Federal Reserve holding rates steady in 2025, investor adjustment to the current interest rate environment and market stabilization following three years of cap rate expansion. 'Transaction activity in the second quarter demonstrated a pronounced flight to credit quality, with premium tenants commanding cap rates lower than the market averages,' adds Jimmy Goodman, Partner, The Boulder Group. High-credit retailers like 7-Eleven, Chase Bank and Wawa commanded sub-6% cap rates, while tenants with ongoing corporate challenges such as Walgreens traded at cap rates in excess of 7%. This bifurcation reflects investors' heightened focus on tenant financial strength amid economic uncertainty. Further proof of this concept is the QSR sector, where corporate QSR brands continued to attract aggressive pricing, with Chick-fil-A and McDonald's maintaining their position as the most aggressively priced assets in net lease at 4.45% and 4.38% cap rates respectively. 'The net lease market continues to show signs of stabilization after three years of cap rate increases, with the second quarter marking a notable change in pricing momentum,' John Feeney, Senior Vice President, The Boulder Group adds. While transaction volume remains below historical peaks, particularly in the 1031 exchange space, the narrowing bid-ask spreads and continued institutional participation suggest improved market liquidity. Investors are closely monitoring Federal Reserve policy signals and broader capital market conditions as they evaluate acquisition opportunities. With cap rate movements moderating and supply-demand dynamics showing greater balance, net lease activity is expected to gain momentum through the remainder of 2025. Pricing and transaction volumes will likely remain well below the peak market conditions experienced in prior years. To view the full report: About The Boulder Group The Boulder Group is a boutique, Chicago-based investment real estate services firm specializing in transaction and advisory services for single tenant net lease properties. Founded in 1997, the firm has closed over $9 billion of net lease property transactions. The firm provides a full range of brokerage, research, advisory, and financing services nationwide. The level of annual, single-tenant transaction volume consistently ranks the firm in the top 10 companies nationally, according to industry benchmarks determined by CoStar and Real Capital Analytics. Media Contact Company Name: The Boulder Group Contact Person: Randy Blankstein Email: Send Email Phone: 8478816388 Address: 3520 Lake Avenue Suite 203 City: Wilmette State: Illinois Country: United States Website:
Yahoo
22-06-2025
- Business
- Yahoo
Best Stock to Buy Right Now: Realty Income vs. W.P. Carey
Realty Income is the largest net lease REIT. The second runner-up in the net lease REIT space is W.P. Carey. Realty Income's yield is 5.6% while W.P. Carey's is also about 5.6%. 10 stocks we like better than Realty Income › If you are looking at buying stock in Realty Income (NYSE: O), you should probably also be considering competitor W.P. Carey (NYSE: WPC). There are a number of reasons for this, from their net-lease business models to their dividends. Here's a look at some key differences and similarities between these two real estate investment trusts (REITs). To start, Realty Income and W.P. Carey do very (very!) similar things. They both own single-tenant properties leased using net leases, which require tenants to pay for most property-level expenses. They both have exposure to retail, warehouse, and industrial assets, with each dipping their toes into unique, one-off properties. They both have portfolios with exposure to North America and Europe. And both have very long histories. W.P. Carey actually helped to popularize the net lease concept before it was a public entity. In many ways, the two net lease REITs are kind of interchangeable. In fact, they even have similar dividend yields, with Realty Income at 5.6% and W.P. Carey offering just a bit more than 5.6%. But no two companies are exactly the same. Realty Income, for instance, is a fairly large company with a roughly $50 billion market cap. W.P. Carey's market cap is a little under $14 billion. That said, the latter is the second-largest net lease REIT. Realty Income just happens to be an industry giant. That extends to the respective portfolios, with Realty Income owning over 15,600 properties and W.P. Carey "just" 1,600 properties or so. That difference requires a bit more clarification, however, because W.P. Carey is more heavily tilted toward industrial and warehouse assets, which tend to be larger. Realty Income's focus is more on retail properties, which tend to be smaller. In some ways, their portfolios are actually somewhat complementary to each other. It wouldn't be a bad plan to own both of these industry-leading net lease REITs. However, there's another big difference that might bother some dividend investors. Realty Income has increased its payout annually for 30 consecutive years. W.P. Carey reset its dividend lower in late 2023 after making the decision to exit the office sector, a move Realty Income made a few years earlier (without a dividend cut). Another difference is that Realty Income pays out its dividend monthly, while W.P. Carey pays on a quarterly basis. W.P. Carey quickly restarted increasing its dividend every quarter, as it was doing prior to the dividend reduction, but its streak still falls well short of Realty Income's. That said, Realty Income is so large that it requires massive investments each year to grow. That shows up in the dividend, which it pays monthly, but increases quarterly, as well. But the last increase was a tiny 0.2% or so (2.3% annualized). W.P. Carey's smaller size allows it to grow more quickly, with its most recent quarterly dividend increase amounting to roughly 1.1% (3.5% annualized). For investors who want a combination of yield and dividend growth, W.P. Carey probably comes out on top here. In the end, Realty Income is something of a slow-moving industry giant. It has a strong foundation, but it isn't going to excite you. W.P. Carey is smaller and more aggressive, leading to faster growth. Given the similar yields, Realty Income will probably interest more conservative types while W.P. Carey will attract more aggressive income investors. Or, as noted, you could buy them both, which might give you the best of both worlds. Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has positions in Realty Income and W.P. Carey. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy. Best Stock to Buy Right Now: Realty Income vs. W.P. Carey was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
31-05-2025
- Business
- Yahoo
Best Stock to Buy Right Now: Realty Income vs. Agree Realty
Realty Income is a net lease REIT with a lofty 5.8% dividend yield. Agree Realty is a net lease REIT with a roughly 4.1% yield. Realty Income wins on yield but falls short of Agree Realty on this key metric. 10 stocks we like better than Realty Income › The S&P 500 (SNPINDEX: ^GSPC) is offering a tiny 1.3% yield today. The average real estate investment trust (REIT) has a yield of around 4.1%. That's the backdrop for investors considering between net lease REIT Agree Realty (NYSE: ADC) and its average 4.1% yield, and Realty Income (NYSE: O) and its above-average 5.8% yield. But there's more than yield to examine in this matchup. At the core of the business models followed by Agree Realty and Realty Income are net lease properties. Generally speaking, these assets are occupied by a single tenant, who is responsible for most property-level operating costs. This gives the tenant effective control over the asset they occupy, and reduces the risk for the landlord, since the property owner doesn't have to deal with the costs and effort of maintaining the asset. Although any single property is high risk, because there's just one tenant, over a large-enough portfolio, that risk is well mitigated. Realty Income is the largest net lease REIT with more than 15,600 properties. Agree Realty is a smaller REIT, but still has a significant portfolio with roughly 2,400 properties. But size isn't the only difference between these two portfolios. Agree is focused on owning retail assets in the United States. Realty Income's portfolio is roughly 75% retail, with industrial and "other" assets rounding the portfolio out to 100%. In the "other" category are things like vineyards, casinos, and data centers. It has a far more diversified portfolio, noting that it also has investments in several European countries. Given how much larger Realty Income is than Agree, it simply takes more transaction volume to move the needle on the top and bottom lines. The REIT's diversification helps ensure that it has more levers to pull when it comes to making new investments. From a business fundamentals perspective, Agree is small and focused on growing its core, while Realty Income is larger and more diversified. That has translated into very different valuations, which is, perhaps, appropriate. As noted, Agree Realty's dividend yield is 4.1% or so, right in line with the REIT industry average. Given the higher 5.8% yield on offer from Realty Income, it is pretty clear that investors are affording Agree Realty a premium price. It is worth highlighting that Realty Income, given its large size, is considered a bellwether in the net lease space. If you are looking to maximize the income your portfolio generates, then Realty Income will be the obvious choice here. However, that comes at a cost. That cost is growth. Agree Realty is projecting adjusted funds from operations (FFO) growth of 3.6% at the midpoint of its 2025 guidance. At the high point of Realty Income's guidance, it will only grow adjusted FFO by 2.1% or so. If you prefer to own a REIT that's growing more quickly, the better choice is Agree Realty. There's a secondary impact on the growth front. Realty Income's dividend has increased around 4.3% a year, on average, over the past 30 years. That's not bad, but if adjusted FFO is only expected to grow by 2% or so, investors should expect notably lower dividend increases over the near term. Agree Realty, on the other hand, has a bit more room to increase its dividend. And on that front, it has increased its dividend by around 5.5% a year, on average, over the past decade. Again, the near-term increases might fall below that figure, but they are still likely to be above the dividend growth on offer from Realty Income. So if you lean toward faster-growing dividends, Agree will win. At the end of the day, both Realty Income and Agree Realty are well run, financially strong net lease REITs. Dividend investors probably wouldn't be making a mistake with either one. However, they aren't interchangeable. If you are looking for yield and/or diversification, then Realty Income is the likely winner here. If you prefer faster-growing businesses and dividends, you'll probably prefer Agree Realty. Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy. Best Stock to Buy Right Now: Realty Income vs. Agree Realty was originally published by The Motley Fool
Globe and Mail
31-05-2025
- Business
- Globe and Mail
Best Stock to Buy Right Now: Realty Income vs. Agree Realty
The S&P 500 (SNPINDEX: ^GSPC) is offering a tiny 1.3% yield today. The average real estate investment trust (REIT) has a yield of around 4.1%. That's the backdrop for investors considering between net lease REIT Agree Realty (NYSE: ADC) and its average 4.1% yield, and Realty Income (NYSE: O) and its above-average 5.8% yield. But there's more than yield to examine in this matchup. What do Agree Realty and Realty Income do? At the core of the business models followed by Agree Realty and Realty Income are net lease properties. Generally speaking, these assets are occupied by a single tenant, who is responsible for most property-level operating costs. This gives the tenant effective control over the asset they occupy, and reduces the risk for the landlord, since the property owner doesn't have to deal with the costs and effort of maintaining the asset. Although any single property is high risk, because there's just one tenant, over a large-enough portfolio, that risk is well mitigated. Realty Income is the largest net lease REIT with more than 15,600 properties. Agree Realty is a smaller REIT, but still has a significant portfolio with roughly 2,400 properties. But size isn't the only difference between these two portfolios. Agree is focused on owning retail assets in the United States. Realty Income's portfolio is roughly 75% retail, with industrial and "other" assets rounding the portfolio out to 100%. In the "other" category are things like vineyards, casinos, and data centers. It has a far more diversified portfolio, noting that it also has investments in several European countries. Given how much larger Realty Income is than Agree, it simply takes more transaction volume to move the needle on the top and bottom lines. The REIT's diversification helps ensure that it has more levers to pull when it comes to making new investments. From a business fundamentals perspective, Agree is small and focused on growing its core, while Realty Income is larger and more diversified. That has translated into very different valuations, which is, perhaps, appropriate. Dividend yield or dividend growth? As noted, Agree Realty's dividend yield is 4.1% or so, right in line with the REIT industry average. Given the higher 5.8% yield on offer from Realty Income, it is pretty clear that investors are affording Agree Realty a premium price. It is worth highlighting that Realty Income, given its large size, is considered a bellwether in the net lease space. If you are looking to maximize the income your portfolio generates, then Realty Income will be the obvious choice here. However, that comes at a cost. That cost is growth. Agree Realty is projecting adjusted funds from operations (FFO) growth of 3.6% at the midpoint of its 2025 guidance. At the high point of Realty Income's guidance, it will only grow adjusted FFO by 2.1% or so. If you prefer to own a REIT that's growing more quickly, the better choice is Agree Realty. There's a secondary impact on the growth front. Realty Income's dividend has increased around 4.3% a year, on average, over the past 30 years. That's not bad, but if adjusted FFO is only expected to grow by 2% or so, investors should expect notably lower dividend increases over the near term. Agree Realty, on the other hand, has a bit more room to increase its dividend. And on that front, it has increased its dividend by around 5.5% a year, on average, over the past decade. Again, the near-term increases might fall below that figure, but they are still likely to be above the dividend growth on offer from Realty Income. So if you lean toward faster-growing dividends, Agree will win. What are you trying to achieve? At the end of the day, both Realty Income and Agree Realty are well run, financially strong net lease REITs. Dividend investors probably wouldn't be making a mistake with either one. However, they aren't interchangeable. If you are looking for yield and/or diversification, then Realty Income is the likely winner here. If you prefer faster-growing businesses and dividends, you'll probably prefer Agree Realty. Should you invest $1,000 in Realty Income right now? Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
