As we head into summer, cap rates for net lease propertiesremain low. Net lease retail averages dropped from 7.06% in Aprilto 6.84% in May. Dollar Stores highlighted this drop with cap ratesdipping beneath 8% to a 7.47% average. While other sectors such asQSR and C-Stores posted minor cap rate increases, overall the netlease market is experiencing some of the boldest low cap rates inmemory.
Investors continue to demonstrate heavy demand for net leaseproperties and supply remains limited. Though there was talk at theLas Vegas ICSC of new construction finally entering the pipeline,there will likely be some lag time before we see an impact on caprates. Likewise, interest rate increases have been modest enough tonot have a heavy impact. As summer comes into full bloom, deal flowwill likely slow in pace due to the vacation season. Nevertheless,the net lease market looks to shine bright this summer.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
