On a scheme, the coherent sheaves that are invertible objects for the tensor product (monoid) operation are precisely the coherent sheaves that are (Zariski) locally free of rank one. Is the same true for algebraic spaces? (I believe that this follows from a theorem of Nisnevich since there is simultaneously an etale local section and a Nisnevich local section, but hopefully somebody has a nice answer.)
This is motivated by my (incomplete!) answer to the following MO post: Quotients of schemes by connected groups