As we head into summer, cap rates for net lease properties remain low. Net lease retail averages dropped from 7.06% in April to 6.84% in May. Dollar Stores highlighted this drop with cap rates dipping beneath 8% to a 7.47% average. While other sectors such as QSR and C-Stores posted minor cap rate increases, overall the net lease market is experiencing some of the boldest low cap rates in memory.
Investors continue to demonstrate heavy demand for net lease properties and supply remains limited. Though there was talk at the Las Vegas ICSC of new construction finally entering the pipeline, there will likely be some lag time before we see an impact on cap rates. Likewise, interest rate increases have been modest enough to not have a heavy impact. As summer comes into full bloom, deal flow will likely slow in pace due to the vacation season. Nevertheless, the net lease market looks to shine bright this summer.
View the Full Report.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
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.
