And a continuing economic recovery, coupled with unwillingness among many companies to launch new construction projects, should keep demand high but also restrict supply, resulting in what Berres calls a “yield-starved environment.”

In 2007, for example, Walgreens began building about 650 new stores, he says, but this year the top retailer is only expected to start about 100 new stores. But even though this lack of development activity has helped push down rates, investors remain attracted to properties with investment-grade tenants and that can guarantee a 5% to 6% return. “When they come on line you see them generating significant interest.”

Still, Berres adds, cap rates for Walgreens have hit historic lows, and competition for these and similar properties has gotten fierce. “Public and non-traded REITs are getting aggressive in the low 6% cap rate range while 1031 capital is driving pricing deep into the 4% to 5% range, especially on trophy assets. I've even seen some McDonalds listed at 3.5%.”

But developers have remained a bit more active in sectors like big-box retail, buoying the cap rates for buyers. “That's what makes these properties an attractive investment,” says Berres. JLL, for example, has high hopes for a 139,265-square-foot retail outlet at 2860 S. Highland Ave. in suburban Lombard occupied by The Dump furniture store, which the firm just put up for sale last week. Although The Dump is non-investment grade, the double net lease property is located in a major retail corridor, a big plus for investors who are either getting priced out of investment-grade assets or just looking to diversify a portfolio.

“Lombard has excellent demographics and high traffic counts so the intrinsic value is strong,” he says. “It makes for a sound investment, but can also balance a portfolio from a yield standpoint. If you're out there buying other net lease properties with 4% and 5% rates this one will give you a nice, overall blend.”