Electric Vehicle Panic Fades as Automotive Retail Assets Reclaim Investor Confidence in Net Lease Market

Written by:

Rudi Davis

Date:

24 Jan 2026

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The automotive retail segment is quietly regaining favor in the net lease market as investor concerns about electric vehicle (EV) disruption subside and buyers focus on the proven strength of established operators. This renewed confidence, according to one industry expert, highlights a broader trend: after a period of hype-driven anxiety, investors are returning to fundamental asset analysis.

Dave Wirgler, Vice President at Sands Investment Group, says discussions around automotive assets have changed significantly in the past two years. “You’ve got Advance Auto Parts, O’Reilly Auto Parts, and AutoZone – all strong tenants. Each has challenges in certain markets, but overall, they offer reliable performance,” Wirgler explains.

Until recently, fears about the future dominated conversations about these assets. Many buyers questioned whether EV adoption would undermine demand for automotive parts retailers like O’Reilly or AutoZone, and whether these properties could become obsolete as the vehicle fleet changed. “A lot of buyers would ask, ‘What happens to these stores if everyone switches to electric? Are people still going to work on their cars?” Wirgler says.

EV Anxiety Recedes

According to Wirgler, investor anxiety about EV disruption has eased. “The hype around electric vehicles has died down a bit,” he says. “We’re seeing more demand in the automotive segment again.”

Geographic differences remain, with more pronounced concern in California, where EV adoption and government promotion are strongest. “My California clients were the most vocal about EV risks, and the buyer pool there was more cautious,” Wirgler notes. In that market, it was common to hear, “Uh oh, electric vehicles – what’s that going to do to auto parts stores?”

But even in California, he reports, the panic is fading. “That concern is dying down, and now I’m hearing more interest in buying O’Reilly Auto Parts locations.”

AutoZone’s Safe-Haven Status

AutoZone has emerged as a beautiful asset for buyers prioritizing security and predictable income. “AutoZone is a favorite – buyers love those deals,” Wirgler says. The typical structure is a low-rent, 20-year ground lease with a corporate guarantee, usually around $2 million per deal. While cap rates remain compressed, investors consider these assets safe and stable.

Two or three years ago, buyers hesitated at these low cap rates, concerned about the segment’s future. Now, investors view the same deals as a reasonable trade-off for the security they provide. “There’s much less hesitancy now,” Wirgler observes.

The appeal lies in the combination of a strong corporate guarantee, long-term lease, and manageable deal size. For investors focused on certainty rather than maximum yield, these factors are decisive.

O’Reilly’s Growth and Investor Interest

O’Reilly Auto Parts is also drawing increased attention, in part because of its ongoing expansion. “O’Reilly is building more hub stores and getting more active in new locations,” says Wirgler. This growth signals to both developers and buyers that the company is investing in its future, not simply defending its existing footprint.

This expansion provides developers with steady project opportunities and reassures investors that O’Reilly’s business model remains viable, even as the broader auto industry slowly shifts toward EVs. Demand for comparable sales data on automotive assets is rising, with Wirgler reporting a surge in developer requests for comps in recent weeks. This suggests that both new development and acquisition activity are increasing in the segment.

Why Automotive Is Back in Favor

The recovery of automotive retail assets shows a broader market reality: prevailing narratives often shape investor sentiment, rather than sudden changes in business fundamentals. Two years ago, the EV story led many buyers to question whether auto parts retailers would become stranded assets. Since then, consistent performance and continued expansion by companies like AutoZone and O’Reilly have restored confidence.

The transition to electric vehicles is occurring more gradually than some forecasts predicted, allowing automotive retailers time to adapt their inventory and service offerings. As Wirgler notes, these companies are adjusting their product mix to remain relevant as vehicle fleets evolve.

Comparisons to Grocery and Medical Office

Wirgler contrasts automotive retail’s resurgence with the ongoing popularity of grocery and medical office assets. “There’s a lot of buyer demand for grocery stores as essential assets, but not enough new development,” he says. Investors are also showing strong interest in medical office buildings, especially in regions with underbuilt healthcare infrastructure. “If more high-credit medical systems expand, those properties will continue to gain attention,” Wirgler adds.

This comparison underscores the fact that automotive retail is once again viewed as a core, resilient asset class—on par with grocery and medical office—after a period of heightened uncertainty.

Is Investor Optimism Warranted?

The key question is whether renewed investor confidence in automotive retail is justified, or if it simply reflects a lull in EV-related anxiety. Wirgler believes most investors have moved past theoretical debates about the industry’s future and now follow the practical reality that operators like AutoZone and O’Reilly continue to perform well and expand.

Whether this confidence will hold depends on the pace of the EV transition and on automotive retailers’ ability to adapt. If electric vehicle adoption accelerates, retailers will need to continue evolving their offerings to stay relevant. For now, the evidence suggests that buyers have regained faith in the sector’s stability.

Looking Ahead

The fading panic over electric vehicle disruption has allowed automotive retail assets to reclaim their place as viable, even desirable, investments in the net lease market. Investors are refocusing on fundamentals such as tenant strength, lease structure, and long-term viability.

In the future, the segment’s performance will depend on how quickly the automotive landscape changes and how effectively retailers respond. For now, established names like AutoZone and O’Reilly offer the predictability and resilience investors seek in an uncertain market, making them top choices for those prioritizing stability over speculation.