The storyline remains the same for net lease properties - an excess of demand and lack of supply. As a result, cap rates continue to trade at record lows. Though there was some speculation rising interest rates would contribite to an increase in cap rates, at this point, those interest rate increases have been abosrbed. This is because even though interest rates may be rising - they still remain at historic lows compared to the previous market high in 2006. During that boom, investors were commonly dealing with interest rate vs cap rate spreads of 60 bps. Today - even with the interest rate increases - that spread stands at 200-250 bps. As a result, it still makes sense for transactions to trade at these seemingly bold low rates.

Another interesting trend observed this summer has been the increased length in transaction time. There has not been a decrease in deals going around but there has been an increase in the amount of time they take to be completed. This is due to the natural summer proclivity for vacations. With the economy improving, lawyers, investors, brokers etc are much more willing to take their families for week long vacations. This is in contrast to a few years ago at the nadir of the market - when many didn't take vacations or at least reduced their length to avoid the appearance of unwarranted extravagence. Thankfully this summer, the climate has improved to leave some footprints in the sand.

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