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Cap Rates Hit Recent Lows As Real Estate Market Heats-Up

Restaurant Research LLC

ChainRestaurantData.com

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 - pnisbet@marcusmillichap.com or call (206) 826-5700 ext. 5718.

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