CHICAGO—Net lease investors have for some time considered bank branches one of the best investments on the market, pushing down the cap rates for these properties to historically low levels. In the past year, however, things have changed, and rates took a big jump upward, according to a new study by the Boulder Group, a net lease firm in suburban Chicago.
Rates increased to 4.75% in the first quarter of 2016 after reaching a previous historic low of 4.35% one year ago. During the same time period, rates for the entire net lease retail market fell 22 bps. For its study, Boulder considered both national and regional banks, regardless of credit.
The fact that bank rates had sunk so low was just one of many contributing factors to the increases over the past year, Randy Blankstein, president of Boulder, tells GlobeSt.com. “The other main factors were bank branch overexpansion from 2003 to 2007 and bank consolidation in the past few years.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
