National asking cap rates for single-tenant drug stores compressed to 5.8% in the third quarter, driven by increasing investor demand, according to The Boulder Group's most recent net lease report on the sector.
That's a 59 basis point decrease over Q3 2020 numbers, the firm says.
"New historic low cap rates levels for CVS and Walgreens of 5.15% and 5.40% respectively were the primary driver of the compression," says Randy Blankstein, President, The Boulder Group. "Investor demand for essential retailers carried over from 2020 into 2021, propelling cap rates for all three major tenants in the single tenant drug store sector lower."
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