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RESTON, VA-The dominant story line for credit tenant net lease assets—the decline of cap rates in this space—continues, according to the latest quarterly report by locally-based Calkain Cos., and New York City-based Chandan Economics. Cap rates for retail net lease properties tracked by Chandan declined to a rolling average of 7.1% in June. Also, preliminary data for July and August show the compression continuing into the third quarter–even as spreads over the risk-free benchmark widened.

“This has been a consistent story for some time” Calkain principal Jonathan Hipp tells GlobeSt.com. “There is a direct imbalance between investor demand and supply, especially for well located credit properties. Combine that with historically low interest rates and we get the current pricing and cap rate environment.” He adds that the industry is posting executions at the same level as 2007, “which a lot of people thought we would never see again.”

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