Investors Pay Up for Single-Tenant Retail

Jeremy McChesney is an SVP at Hanley Investment Group Real Estate Advisors.

Single-tenant retail activity is heating up. This year, the single-tenant retail market has been active, with several transactions breaking cap rate records. Jeremy McChesney, EVP of Hanley Investment Group Real Estate Advisors, recently closed three deals for single-tenant and two-tenant 7-Eleven properties in Los Angeles, San Diego and Bakersfield. In Los Angeles, the deal broke the record for the lowest recorded closing cap rate for a multi-tenant retail property. We sat down with McChesney for an exclusive interview to find out how investors are responding to the record-low cap rate environment. He says that in Southern California these retail properties are commodities, and investors know that they have to pay to play in the market. Here, he tells all about the trend for single-tenant retail.

GlobeSt.com: What are the pricing and cap rate trends for single-tenant retail properties in Los Angeles? How about two-tenant retail properties, like the one you sold in L.A.?