Restaurant Research LLC
Cap Rates Hit Recent Lows as Real Estate Market Heats-Up
- Lower cap rates, lower rents and higher acquisition activity suggest that the retail commercial real estate market is heating-up as market participants currently seem more inclined to buy than rent.
- Cap rates seem to be following the same trend as last year - down slightly in the first 4 months of the year followed by a sharper decline in months 5-6.
- This resulted in the lowest cap rates since the onset of the 2008 recession at the end of June.
- Capitalized rents appear to be declining as indicated by -13% reduction in median price/s.f. from 2H11 to 1H12.
- Transaction activity was up sharply during 1H12 with more deals completed during any 6 month time frame since 2008.
Source: Marcus & Millichap
About the Contributing Firm: The Nisbet Group is a member of the National Retail Group of Marcus & Millichap which specializes in representing institutional and private companies in the disposition of multi-tenant and single tenant retail properties. Please contact Peter Nisbet, Vice President of Investments, Senior Director, National Retail Group - firstname.lastname@example.org or call (206) 826-5700 ext. 5718.
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