CHICAGO—The economic recession brought big changes to Americanretail. It hit middle-market stores hard, but many outlets servingcost-cutting consumers thrived, and investors continue to buy upthe growing number of dollar stores, according to a new researchreport. The Boulder Group, a net lease investmentbrokerage firm located in suburban Chicago, found that cap ratesfor the top net leased dollar store brands have fallen even furthersince the third quarter of last year.

“They trade at a premium compared to other properties becausethe lease terms are ten years or more, you have investment gradetenants, and the price points work well for small investors,”Randy Blankstein, president of Boulder, tellsGlobeSt.com. Typically, investors can buy the top dollar stores forbetween $1.1 million and $1.5 million.

Properties tenanted by Dollar General,Dollar Tree and Family Dollarexperienced cap rate compression of 51, 75 and 50 bps respectively,Boulder found. Rates for Dollar Trees fell to 7.0% and FamilyDollars hit 7.5%. “Cap rates for Dollar General represented thelowest overall cap rates in the sector (6.75%) due to the abundanceof newly constructed locations. Additionally, typical leases forDollar General are fifteen year and triple net as opposed to thetypical ten year double net leases for Family Dollar and seven orten year double net leases for Dollar Tree.”