The years following the Great Financial Crisis saw a dramatic increase in STNL property investment. Spurred by the pandemic, these essential properties continue to experience a heightened demand from investors seeking stabilized, cash-flowing, and low maintenance assets. While sellers enjoy strong returns, buyers are facing increased competition, elevated pricing and shrinking cap rates. STNL assets that were a 6 percent cap rate 18 months ago, are at least 100 basis points less now in many cases. This is especially true in certain "hot" sectors like drive-thru restaurants, dollar stores, and other essential retailers. 

Buyers are now looking to other STNL opportunities that will create better returns. The pawn shop sector is one of them. Over the past 36 months, pawn shop-occupied assets have been quietly traded, experiencing a national cap rate compression of 300 bps, yet this sector is still providing 6%-plus returns.

The stereotype people have when it comes to pawn shops is often associated with a property located in an undesirable part of town in a less-than-attractive building. However, what is often overlooked is the fact that there are so many factors surrounding the pawn industry that make it one of the most stable, secure, and lucrative options for investors. These properties offer what most investors are seeking right now, which is credit-worthy, recession-proof, and ecommerce-proof assets.