Ayson Shammami, Managing Partner at APEX Commercial Real Estate Advisors, recently addressed the most common questions about triple net lease investment in today’s market. In a detailed interview, Shammami explained recent shifts in deal flow, investor behavior, and the realities facing both buyers and sellers after a period of rapid change.
Market Status Overview
Triple net lease investment activity has rebounded after a period of historic lows. “Deal flow and transactions for me, specifically, over the last 12 to 18 months have increased. And from what I’ve seen in the market, I think, generally speaking, it’s up in the investment sales arena,” said Shammami, who works with clients nationwide and was the top agent at his previous firm in 2023.
After a volatile stretch marked by record-low transaction volume, the market is now seeing more deals as participants adjust to higher interest rates and revised expectations.
Addressing Top Questions
How does current market activity compare to recent years?
Shammami described the past 18 months as a low point for transaction volume. “Twelve to eighteen months ago was probably the slowest volume I think I’ve seen,” he said. He recalled an 18-month boom from June 2020 to January 2022, when interest rates were at historic lows and deal activity peaked. As rates began to climb, uncertainty set in and deal flow slowed sharply.
What’s driving the recent uptick in transactions?
Shammami attributes the increase in activity to sellers adjusting their expectations. “Now that rates have been high for about three years, people are not just waiting. There’s still a lot of people waiting, but transactions are starting to get done,” he said. “The biggest thing is, I think sellers are conforming to the market. A lot of sellers understand now that rates are high, they’ve been high.”
How has the investor base changed?
Shammami observed a significant shift among investors. “I’ve noticed a huge shift in the investor pool,” he said. He explained that many traditional real estate professionals who previously built wealth through acquisitions are no longer buying, as returns have fallen far below what was available in prior cycles.
Misconceptions Clarified
Shammami addressed common misconceptions about triple net lease investments, particularly regarding 1031 exchanges and market timing. “The only thing that’s really changed, I’ve noticed, is that there really are not much, 1031, exchange buyers,” he said, highlighting a major change in buyer demographics.
He also clarified that while uncertainty initially stalled the market, most participants have now adapted to the current environment. Rather than waiting indefinitely, buyers and sellers are moving forward as higher rates become the new normal.
Practical Advice for Investors
For those considering triple net lease investments, Shammami emphasized the importance of due diligence on credit risk and lease structure. “The biggest thing that I find myself educating them on is the credit risk and the profile behind the guarantee of the lease that they’re buying,” he noted.
He also advised that investors reset their return expectations. Buyers today are “essentially parking their capital to collect six to seven to eight percent returns” instead of seeking the rapid equity gains that characterized earlier market cycles.
Looking Forward
Looking ahead, Shammami sees continued activity as liquidity remains strong and more sellers accept current pricing realities. “There’s buyers that are sitting on a lot of liquidity, more liquidity than they’ve ever sat on, and they’re just waiting to put their capital to work,” he said. As market conditions stabilize and sellers align with current values, transaction volume is likely to remain steady.
Shammami’s insights provide a clear view of the current triple net lease market, where adaptation and realistic expectations are driving renewed deal flow and ongoing investor interest.
