Things grew worse still for net-lease REITs. In May Dallas-based Spirit Realty Capital missed its earnings projections, and the stock plunged by about 20 percent. As Stephen Horn, chief acquisition officer of Orlando, Fla.–based National Retail Properties observed: “One of our competitors didn’t have a great first quarter with their earnings release. Spirit Realty got hammered, and the net-lease REIT sector got crushed. The tide went out, and we all went out with it.” By midyear, net-lease REITs managed to recover, but only a little, says Horn. By mid-June, retail REITs had fallen by 16 percent, versus a gain of 8.9 percent for the S&P 500, according to The Wall Street Journal.

The problem is that investors are so nervous about retail REITs, the net-lease REITs have had to suffer equally, their comparatively good performance notwithstanding. But the fact is, freestanding-retail REITs such as Spirit, National Retail and San Diego–based Realty Income Corp. derive about 90 percent of their annualized rental revenue from tenants in the service, nondiscretionary and low-price retail businesses — which are less susceptible to economic recession or to Internet retail competition, according to Chicago-based Zacks Investment Research.

At the end of the first quarter, Realty Income’s portfolio occupancy rate was 98.3 percent, about where the firm anticipates it will remain for the rest of this year, says CEO John Case. Spirit’s rate is nearly 98 percent among 2,514 properties. National Retail, meanwhile, boasts an occupancy rate of 99 percent among its 2,600 properties, and the company has historically enjoyed a renewal rate of 85 percent.

As with shopping center operators, and as with any real estate company, one major risk is the loss of a tenant. A big shopping center can generally withstand a few vacancies because there are so many other tenants to help offset the loss. But with single-tenant real estate, there is no such offset, and the loss of the tenant can be catastrophic. Single-tenant leases “involve specific and significant risks associated with tenant default,” according to Zacks Investment Research. “In the case of financial failure of or default in payment by a single tenant, the company’s rental revenue from the property, as well as the value of the property, suffers significantly.”

For Spirit, a big concern has been with Shopko, which has been closing stores over the past three years. National Retail owns properties leased to outdoors-gear specialist Gander Mountain. In March Gander Mountain filed for bankruptcy and announced store closings.

The net-lease industry needs to “take a real hard look at the sports industry,” Horn said. “It is going to be a challenging market. We are going to take a long look at the underlying real estate if we are asked to take on a sports store.” (Last year Sports Authority and Golfsmith both filed for bankruptcy.)

So where are net-lease REITs headed? Drugstores are the largest tenant group for Realty Income, representing 11.1 percent of rental revenue as of the end of the first quarter. The firm’s second largest tenant base is convenience stores. “We are bullish on the convenience-store industry, and it will be one of our top industry investments,” said Case. “We’re focused on the highest-quality convenience stores, like 7-Eleven, Couche-Tard and Circle K.”

Convenience stores are the largest category in the National Retail portfolio, accounting for about 16 percent. The company no longer invests in drugstore real estate, so its second-largest category is full-service restaurants, at 12 percent, followed by quick-service restaurants, which represent 8 percent. The firm’s next largest category is automotive services, and that is represented primarily by just one brand: Mister Car Wash. Though not widely known, Mister Car Wash is the largest car wash company in the country.

Then, too, despite their tendency to load up on service providers and drugstores, not even big net-lease REITs can count on always being free from any exposure to Internet competition. To be sure, for now convenience stores, restaurants and especially car washes appear to operate well beyond the competitive range of Internet retail. But the speed of technological innovation and the unpredictability of consumer patterns being what they are, the future can never be perfectly ascertained. Grocery stores always looked like a safe bet, and, indeed, Kroger happens to be among Realty Income’s top 20 tenants. And yet Amazon.com’s purchase of Whole Foods suggests that the grocery industry could end up looking very different tomorrow from what it looks like today.

In any event, net-lease REITs are doing their best to position portfolios for economic strength and for maximum immunity from the powers of e-commerce. But there are still no guarantees, and as has already been seen: Often when one sector sneezes, another sector catches cold.