CHICAGO—Strong demand from 1031and private investors pushed cap rates for the single tenant netlease retail sector down slightly to just 6.1%, another historiclow, in the third quarter of 2016, according to a new report fromthe Boulder Group, a net lease investment firm insuburban Chicago. During the same period, cap rates for the officeand industrial sectors decreased to 7.08% and 7.14% respectively,declines of 17 and 12 bps. Retail cap rates have stayed below 6.65%since early 2015.
“The uncertainty of traditionalinvestment asset classes coupled with the stable yields generatedby the single tenant sector has created an abundance of investordemand for this sector,” Boulder says. The number of retailproperties on the market increased slightly, from 3,310 to 3,353,but there remains a lack of new construction properties with longterm leases.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
