For investors utilizing 1031 tax exchanges or forced into using a 1033 (an involuntary conversion usually derived from eminent domain), net leases are one of the optimal reinvestment choices because of their pliability (able to be bought in distinct, manageable bite size) and their inherent passive nature.

Investors coming out of tax-driven situations like a 1033 or a managed apartment building are typically looking for less headaches all around. Headaches would include both capital calls and maintenance, but also complex limited partnership structures. Investors can buy multiple net leases to cultivate the optimal 1031/1033 and still satisfy all the driving forces including but not limited to their 1031 and 1033 requirements. 

With the large rise in 1033 money and uptick in 1031 activity, net leases seem likely to experience more interest from these investors. Many feel the real estate market is beginning to stabilize and are thus more willing to transact on properties. This activity combined with the “flight to quality” desire of the market is leading investors to net leases.

In essence, the popularity of net leases reflects the growing change in market sentiments. People are no longer so willing to try for the home run investment only to swing and miss. Times have proven that building sustainable wealth is only possible through dependable investments. Net leases represent that steady base hit which builds long lasting financial security and success.