Convenience stores are garnering big interest from both institutional and private investors looking for stable income opportunities in the net lease sector, according to a new analysis from B+E Net Lease.
Cap rates remain low for quality net lease C-store assets, analysts say, with an average on-market cap of 5% and a 2022 year-to-date sale cap of 5.26%. And quality matters: B+E says smaller and lesser-known operators with older buildings are "massively outperformed" by their Class-A counterparts.
"C-stores are garnering a positive perception from both private and institutional investors due to their strong tenant credits, strong profit margins, and large variety of concepts," B+E analysts note in the report. "This variety encourages customers to spend more time at the location and, in turn, spend more money."
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