REOC San Antonio
Commercial Real Estate Since 1974   
Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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Net Lease Market Remains White Hot

Cap rates for the single tenant net leased market remained near historic lows for retail, office and industrial sectors in the first quarter of 2013. Cap rates for net lease office and industrial properties declined while retail cap rates remained at 2012 fourth quarter levels.

Regardless of the decline in cap rates for office and industrial properties, net lease retail properties remain priced at a 45 and 77 basis point premium over office and industrial properties respectively. Properties occupied by credit tenants with long term leases experienced the greatest compression in the first quarter of 2013.

Limited supply of properties, specifically new construction, continues to be a major theme throughout the net lease industry.

Despite the scarce property supply in the first quarter of 2013, the median asking versus closed cap rate spread for net leased retail and office properties rose.

The national single tenant net lease market should remain active throughout 2013 due to the stability and financing availability of this asset class.

A shrinking supply and a limited development pipeline will make newly constructed assets in the highest demand and command the lowest cap rates.

Click to read entire article: Net Lease Market Remains White Hot (National Real Estate Investor, 4-4-13)

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