Overall retail cap rates ticked up a bit in September but remain sub-seven at 6.94%. Banks continue to sport the lowest cap rate average at 5.40%. QSR cap rates are the second lowest at 6.05%. Dollar Stores also saw a reduction in cap rates, going from 7.61% in August to 7.15% in September. Much of this change is being driven by the high demand for Dollar General properties, which often feature fully triple net leases for 10+ years.
Going forward we expect deal flow to pick up in the 4th quarter as investors try to close out deals by year end, and there is a large inventory of single tenant deliveries planned for 4Q14 and 1Q15. Also, we will be looking very closely at rising interest rates to see if continued strong investor demand will be enough to offset the increased price of borrowing.
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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.
