Cap Rates in the Net Lease Sector Continue to Inch Up – Winston Rowe and Associates
The US economy is expanding at record levels which is great news for commercial real estate investors.
Cap rates on net lease retail properties rose by 2 basis points in the first quarter, to 6.37 percent, according to the firm's research.
Cap rates on net lease office assets went up by 8 basis points, to 7.1 percent.
Industrial cap rates, however, declined by 7 basis points quarter over quarter, to 7.0 percent.
That change occurred as the number of industrial net lease properties on the market declined by 2.52 percent in the fourth quarter, to 352.
During the same period, the number of office properties on the market went up by 1.59 percent to 479.
The number of available retail properties declined most substantially in the first quarter—by 8.55 percent to 4,358.
Going forward into 2019, cap rates in the net lease sector will continue to go up through the rest of the year, with 29 percent saying cap rates will move by 25 to 49 basis points and another 29 percent forecasting a more modest, 1- to 24-basis-point increase.
Published by Winston Rowe and Associates a national commercial real estate consulting firm. They can be contacted at https://www.winstonrowe.com