Below is a chart that shows the average cap rates of over 7,000 single tenants net-lease (STNL) sales captured over the last nine years. The red line represents the moving average of the last 200 sales at any given point in time.

This dataset is all inclusive, meaning that it includes long term deals, short term deals, good credit, bad credit etc…As a result there is a wide disparity at any given point in time as to what the highs and lows are, and therefore the average. This is about as macro a look at a niche market that is possible.

Not surprisingly, the figures we see show that cap rates are at a 10-year and likely all-time low, with a constant decline since 2010.

It might be tempting to extrapolate from this graph that the trend will continue however we believe that we are near the absolute bottom. Given a 10-Year treasury yielding right around 2% it's difficult to image a scenario where the spreads between treasuries and real estate tighten much further. Our, just released, 2Q15 cap rate report provides more detail and insight to some of the more recent trends and the immediate future. Go to calkain.com to download a copy of that report.

Instant Insights /

2006 to Now: A Big Picture Look at STNL Cap Rates

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