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CHICAGO—Cap rates for single-tenant bank ground leases have sunk to their lowest level since 2004, according to a study recently released by The Boulder Group, a commercial real estate services firm located in suburban Chicago. Last month, GlobeSt.com reported that cap rates for the single-tenant net-leased market were at historic lows during the first quarter of 2013, but the rate for banks has plunged even lower than other types of businesses.

The bank cap rates compressed by 85 basis points over the past year to 5.0%, The Boulder Group found. Cap rates for other retail remained above seven percent. “The cap rate compression was caused by increased demand for bank ground leases which on average have an overall lower absolute dollar amount than fee simple assets.”

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