CHICAGO—As reported in GlobeSt.com, thesingle tenant net leased market has been red hot for quite sometime, as buyers bid up properties seen as safe investments. Butfew, if any type of property is in as much demand as banks.

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The Boulder Group, a netleased investment broker in suburban Northbrook, for example, justcompleted the sale of a single tenant Bank ofAmerica property located at 4200 S. Ashland Ave. inChicago to a Canadian investor for $5,150,000.

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"Banks are typically the only net leaseinvestments that offer leases of over 15 years, investment-gradetenants and include built-in rental escalations,” RandyBlankstein, president of Boulder, told GlobeSt.com. “A lotof people worry about inflation down the track and rentalescalations alleviate that concern.”

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Over the course of this year, the cap ratesfor single tenant net leased banks have sunk to a historically lowlevel, according to a study released byBoulder. The data show that over the last fouryears the gap in cap rates between banks and other retail haswidened to about 200 bps. Prior to the recession, that gap wasusually about 50 bps.

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This Bank of America property is located ina densely populated part of Chicago with over 30,000 people livingwithin a one mile radius and over 875,000 people living within afive mile radius. The building features five drive-thru lanes and44 designated parking spaces.

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Blankstein and JimmyGoodman of Boulder represented the seller; a Midwest basedreal estate developer, in the transaction.

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There are ten years remaining on Bank ofAmerica's lease, which expires October 31, 2024. The lease features10% rental escalations every five years throughout the primary termand renewal option periods.

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.