ROCKVILLE, MD—A local McDonald's traded at a record low cap rate, according to the brokers that arranged the 1031 exchange. That's the good news for the market. The bad news is, the market for such transactions has likely peaked.

The 3,657-square foot net-leased property sold for $3.9 million, or 3.78% -- a record low for McDonald's restaurants nationwide, according to Josh Ein and Dean Zang in Marcus & Millichap's DC office.

But that is likely it for record-setting net lease transactions here, Zang tells GlobeSt.com. "The market has reached its peak and plateaued. While this sale sets a record we do feel we have reached the peak for cap rates in this cycle."

This particular deal was an off market trade. The seller had restructured the lease with McDonald's five years ago and felt it was time to sell, Zang says. Its ground lease has 22 years remaining, with increases set every five years.

The buyer is a local 1031 exchange, procured with help from Mark Taylor in the firm's Philadelphia office.

The McDonald's located at 2101 Veirs Mill Rd. on 1.01 acres. Its pricing is a reflection of the appeal of owning property in Montgomery County coupled with the scarce demand. In another words, its stable passive cash-flow along with long term appreciation in land value, Ein said.

All agents involved in the transaction are a part of the TZD Group within the firm's National Retail Group.