chi-net lease Much of the new construction seen in the market comes from the dollar store sector. And that large and increasing supply means it is one of the few sectors with increasing cap rates despite the current low cap rate environment.

CHICAGO—Strong demand from 1031 and private investors pushed cap rates for the single tenant net lease retail sector down slightly to just 6.1%, another historic low, in the third quarter of 2016, according to a new report from the Boulder Group, a net lease investment firm in suburban Chicago. During the same period, cap rates for the office and industrial sectors decreased to 7.08% and 7.14% respectively, declines of 17 and 12 bps. Retail cap rates have stayed below 6.65% since early 2015.