IRVINE, CA—Retail investors are keeping awatchful eye on the grocery-store category, and historically lowinterest rates are dictating pricing for investment opportunities.GlobeSt.com spoke with president Edward Hanley andmanaging director Bill Asher of locally basedHanley Investment Group to discuss how these twotopics are impacting the retail sector as a whole and where thesmart investments are.

GlobeSt.com: How are interest rates affecting theretail investment market, and how long will this wavelast?

Asher: It's really fostering premiumspaid on retail investments as a whole that we didn't see inthe last height of the market between 2005 and 2007. That was thelast time we were at that level. We've surpassed that level now,but there's less velocity. The biggest difference is thesingle-tenant retail sector. Here, we're seeing cap rates at anall-time low and pricing at an all-time high—in some instances75-100 basis points less in cap rates than the last run in2005-2007—even with the interest-rate spike we experienced in thespring of 2013. However, the lack of inventory in the marketplaceis the big difference. Any property we put out for sale that'sformally listed is getting a lot of activity and multiple offers.Even off-market opportunities are attracting record pricing asbuyers are scouring the market seeking the right property in whichto invest. There's definitely much more traction now than there'sever been because of the lack of supply and increased volume of1031 exchange requirements. And I think all active investors andowners are wondering how long it's going to last. We keep hearinginterest rates are going to go up at some point, but the timingcontinues to get stretched out due to macroeconomic factors such asunemployment rates and consumer confidence.