Single-Tenant Retail Demand Rising

IRVINE, CA-Demand for top-tier, single-tenant retail properties is on the rise moving into 2013 as supply of these assets dwindles, according to Rick Chichester, president and COO of retail-specialized investment-sales and advisory firm Faris Lee Investments here. Chichester tells GlobeSt.com that cap rates are compressing almost daily for these properties in strong locations with tenants carrying 15 years or more on their leases.

In 2012, “well-located single-tenant properties with credit tenants proved to be in highest demand,” said Chichester in a prepared statement. “However, the supply of top-tier single-tenant properties remains low, which has driven up values as quality assets are moving quickly or being sold off-market. Demand for this product type will continue its upward trend this year, with closing cap rates compressing even more as asking prices or above-asking prices are secured and bidding wars are frequent occurrences.”