Net Lease Investors Reassess Strategy as Volatility Reshapes CRE Landscape Article originally posted on Globe St. on April 2, 2026 As CRE investors navigate through the wild volatility existing in the industry currently, GlobeSt. is taking a look at the performances and fundamentals of a number of asset classes in net lease, from traditional to more secondary ones. A range of experts involved in many different net lease sectors joined our A View From the Top: Investment Opportunities panel at our Net Lease Spring 2026 event. Jimmy Goodman, partner at The Boulder Group, led the discussion, joined by Ross Prindle, managing director and global head of the real estate advisory at Kroll, Anthony Coniglio, CEO of NewLake Capital Partners, Max Jenkins, EVP and chief operating officer of Essential Properties Realty Trust and Justin Heller, managing director at J.P. Morgan. With the boom of artificial intelligence, it’s no secret that just about everyone wants to get a piece of the data center space, despite the public opposition coming its way. Heller highlighted how he’s been leading J.P. Morgan’s net lease strategy in the data center space. “We’ve been drifting off of the success of data centers by partnering with the companies that are further down the supply chain and making products for the construction of data centers. [This includes] the concrete, the coils, any of the cooling components, the electronics, the metal stamping and bending needed to construct a data center,” he said. “All of those companies are experiencing massive levels of tailwinds and need capital.” Prindle said that he has one unnamed client who’s buying all into the data center hype. “They’re very large, complex deals with lots of infrastructure to underwrite,” he revealed, “And they’re moving forward and being one of the largest players in it.” Still, Heller cautions and notes that data centers are still a small piece of the puzzle for CRE operators, where he estimates the sector accounts for between five and 20 percent of revenue for these companies. This is a good thing for broader and larger companies like Meta. “This is a more diversified business where they benefit, again, from the tailwinds of data centers, but they’re not solely reliant, so it’s a more de-risk way in our minds to play the data center growth, he explained. Smaller Retail Subtypes Find Success Meanwhile, Essential Properties focuses on sales-leasebacks in three retail subtypes: restaurants, car washes and childcare services. The company likes to avoid taking big risks or investing in larger asset classes — but this strategy works for them, according to Jenkins. “We like those fungible, small, granular properties. And last year we did almost 200 transactions,” he explained, adding that Essential’s volume came out to $1.03 billion in total. As far as location, there isn’t a state or region that Essential Properties will avoid working in. Simply put — it follows the lead of its clients, trusting that they know what places will work best for them. “Texas, Florida, Georgia [and Arizona] are going to be up high and malicious with the amount of [population] growth that those states have seen,” Jenkins highlighted. “We kind of rely on our operators, [which] know what markets and demographics they’re looking for.” New Net Lease Players Target Funds in Retail and Industrial Elsewhere, Prindle said that entries to the net lease space have picked up over the past year, with many starting funds. They are targeting retail, industrial and specialty asset classes. While Prindle, doesn’t see these funds targeting office as frequently, he thinks that could change soon, although it may depend on where interest rates wind up, given the recent volatile yields have seen as a result of the Middle East conflict. “It’s the interest rate environment in such where they can get their hands around, where the cap rates are, and what they can buy,” he said of the new firms entering the net lease space. Now, [if rates] start spiking up again I think it’s going to slow things down quite a bit, because a lot of these folks are still using debt as part of the process.” Cannabis Isn’t Looking So Green Then there’s a retail subtype that’s not exactly smoking — cannabis. New Lake provides capital to licensed operators across the country, with CEO Anthony Coniglio noting that a combination of regulation, oversupply and lack of demand is crushing the sector. “In some states, such as in Massachusetts, in 2023, you had the price per pound of cannabis go from $4,000 a pound to $1,800 a pound within four months,” Coniglio explained. “So just think about that. Your top line goes down over 50% in four months. Not many of the businesses can survive that and they have to adjust it.” He added that one of his tenants has filed for bankruptcy and another has defaulted on two properties. Right now, Coniglio refers to the Cannabis state as “nuclear winter” after the industry enjoyed “hyper growth” in 2020 and 2021. What may make the pain go away for the cannabis sector? There’s hope that marijuana will be rescheduled from one to schedule three, which would become legal nationally if prescribed. “President Trump signed an executive order in December directing the Department of Justice to complete that process, [which] started a few years ago,” he said. “That could be a real catalyst that would improve the cash flow fundamentals of the industry. It eliminates certain onerous taxation and you’re going to see better access to capital.” But not all asset classes are created equal, of course. Some are thriving, while others slump. One thing is true for all: nothing is exempt from general market volatility and the trends in the coming weeks on the geopolitical front will be critical for CRE as a whole.