Over the past two years we have seen substantial cap rate compression in the net lease casual dining subsector. In past years, this sector was typically marked by higher cap rates than the overall net lease retail market - this trend has somewhat abated.
The recession hit casual dining hard as many customers cut budgets back and dining out was an easy sacrifice. The lack of net lease product on the market along with a return of economic stability has increased this sector's desirability.
In 2012 casual dining averaged a 7.25% cap rate - down from 8.53% in 2011. So far for 2013 - that decrease has continued with a 7.17% average cap rate for the subsector.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
