National asking cap rates in the single-tenant drug store sector increased to 6.4% in the third quarter, according to The Boulder Group's Net Lease Drug Store Report. This represented a 17 basis point increase when compared to the prior year.
"The drug store sector, hasn't been developed a lot in the last few years," states Randy Blankstein, president of the Boulder Group. "They've been renegotiating leases. A lot of the stuff that has traded was older because people see the cap rates come down and want to take advantage of it.
In the third quarter, the net lease drug store sector was priced at a 33 basis point discount to the net lease retail sector. The increase in cap rates for the drug store sector was driven by a shorter average remaining lease term, which dropped to 10 years in the third quarter.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
