Convenience stores are seeing steady investment volume and state compared to peer asset classes, according to a new report from Avison Young.
"While a slight uptick in average cap rates was observed toward the close of 2023, this pales in comparison to other product types such as office buildings," they wrote. "An interesting observation is the deviance between C-Store cap rates and U.S. 10-Year Treasury yields, which have historically had a direct relationship."
The future of cap rates is uncertain, as the report notes. On one hand, the Federal Reserve, which signaling an expectation of rate cuts this year is also warning that it won't back down from reducing inflation. But Wall Street expects the cuts to happen, which would likely mean that cap rates would steady and then drop with the lower costs of investment.
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