One result of that trend, according to The Boulder Group, is a smaller pool of available net-lease retail properties. "What is important about the big-box stores is that while they only comprise 3.6% of the properties available, they represent 9.3% of the total value available in the retail sector of the net-lease market," according to the report authored by The Boulder Group research director Jeff Rothbart. "This disparity can be attributed to higher purchase prices that accompany buildings over 30,000 sf."
The average sales price of $5.23 million for a big-box store—$127.94 per sf--is nearly triple the rest of the retail sector, according to Rothbart's most recent report. Because they tend to be older locations, capitalization rates average 8%, or a half-point better than the rest of the market.
Meanwhile, Rothbart notes Best Buy plans to open 73 stores in the US, Staples has another 100 in the works and Barnes & Noble plans to continue an explansion program that saw 31 openings last year. Barnes & Noble and book-selling rival Borders are among the most expensive properties on the market at $368 per sf. Average asking capitalization rates differ sharply, however, as Barnes & Noble stores are on the market at a 7.2% rate, while Borders' average an 8.18% cap rate.
The majority of available big-box net-lease properties are found in just six states, led by California with 28% of the market followed by Florida (8%), Ohio (7%), Louisiana, South Carolina and Texas (5% each).
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