Below is a chart that shows the average cap rates of over 7,000 single tenants net-lease (STNL) sales captured over the last nine years. The red line represents the moving average of the last 200 sales at any given point in time.
This dataset is all inclusive, meaning that it includes long term deals, short term deals, good credit, bad credit etc…As a result there is a wide disparity at any given point in time as to what the highs and lows are, and therefore the average. This is about as macro a look at a niche market that is possible.
Not surprisingly, the figures we see show that cap rates are at a 10-year and likely all-time low, with a constant decline since 2010.
It might be tempting to extrapolate from this graph that the trend will continue however we believe that we are near the absolute bottom. Given a 10-Year treasury yielding right around 2% it's difficult to image a scenario where the spreads between treasuries and real estate tighten much further. Our, just released, 2Q15 cap rate report provides more detail and insight to some of the more recent trends and the immediate future. Go to calkain.com to download a copy of that 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.
