Archive for Cap Rates

Oct
23

Wal-Mart Sale Sets Record Low Cap Rate

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More evidence of a commercial real estate resurgence in Pensacola, Walmart Neighborhood Market has traded hand in Pensacola. The price for the 42,296-square-foot retail asset was $4.1 million.

Don McMinn and Zachary Taylor, both vice presidents investments in Marcus & Millichap’s Atlanta office, represented the seller, a Tennessee-based developer. Patrick Furlong, associate in the firm’s Seattle office, represented the buyer, a private 1031 investor. Kirk Felici, first vice president in the firm’s Miami office, is the firm’s broker of record in Florida.

“We eventually closed with an all-cash 1031-exchange private investor at a price that was 70 basis better points better than the seller’s expectations,” says McMinn. “The below 5% cap rate set a record at the time as the lowest cap rate for a Walmart Neighborhood Market. We are about to bring two more Walmart Neighborhood Market assets to market, one in Atlanta and one in Charleston.”

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Sep
04

Calkain: NNN Cap Rates Dropped in August

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Overall cap rates dropped in August to an average of 6.58%. The sectors with the lowest cap rate averages were Banks (5.35%) and Pharmacies (6.29%). Dollar Stores had the highest average at 7.61%. That said, well located Dollar Stores with long term leases were seen trading in the mid to low 6 cap range. Typically deal flow slows somewhat in summer as people take vacations etc. The fourth quarter on the other hand is marked by intense deal flow as people seek to get exchanges completed before the year ends.

Net lease properties continue to be a highly desired asset and a good play for any investor with the requisite capital.

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Sep
20

3Q PWC REAL ESTATE INVESTOR SURVEY™ RELEASED

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The 2013 3Q PwC Real Estate Investor Survey™ arrived this morning. A quick glance at the survey shows that respondents report declining cap rates in every category except Net Lease (+15 bp) and Power Centers (+4 bp). The industrial sector leads the way in cap rate declines with Warehouse cap rates down 18 basis points, and Flex/R&D down 32 basis points since the last quarter. Apartment cap rates continue to decline, and set the low end of the range at 5.61%.

Michael B. Dodds, MAI, CCIM

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Jan
10

Retail NNN Cap Rates Hit Five-Year Low

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Cap rates for the single-tenant net leased market continued to remain near historic lows in the fourth quarter of 2012. Most notably, cap rates for net leased retail properties declined by 25 basis points and are experiencing a premium in excess of 75 basis points over both office and industrial net lease properties.

Supply issues remain to be at the forefront of the net lease market as new construction is limited and there is a lack of existing supply of long-term net leased properties. In the fourth quarter there was a 12.5 percent decline in supply of retail net lease assets. One of the primary factors contributing to the lack of supply and new construction is that tenants are able to achieve low rents by backfilling second generation retail space. Furthermore, the current interest rate environment has enabled property owners to refinance and hold properties at historically low rates rather than sell.

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Sep
13

Cap Rate Trends Since 1995

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Interesting chart from Wells Fargo Securities, LLC

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Jul
01

PwC Survey: Commercial Real Estate Investors Optimistic

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Commercial real estate investors are cautiously optimistic about an industry recovery despite recent disappointing labor reports and falling home prices, according to data from PricewaterhouseCoopers’ second quarter PwC Real Estate Investor Survey (formerly known as the Korpacz Survey).

Average overall capitalization rates, which are initial returns anticipated on an acquisition and a reflection of an investment’s anticipated risk, declined in all of the property types tracked in the PwC survey. Decreasing capitalization rates signal a recovery. The apartment sector is leading the industry recovery followed closely by the resurgent office market, which had a slow start. The steepest declines reported in the quarterly survey are in the national central business district and the national suburban office markets.

 

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