Net Lease Cap Rates Increased for the Sixth Consecutive Quarter

Cap rates in the single tenant net lease sector increased for the sixth consecutive quarter within all three sectors in the third quarter of 2023 to 6.51%. Single tenant cap rates increased to 6.27% (+10 bps) for retail, 7.41% (+14 bps) for office and 6.96% (+16 bps) for industrial in the third quarter.

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NNN Beast - Net Lease News
November 01, 2023

Estimated read time: 3 minutes and 25 seconds

Notable Sale: Drew Isaac and Ryan Bowlby of Marcus & Millichap, just sold this Olive Garden in Lincoln, NE:

  • Price: $2,270,000 @ 5.85% CAP

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RANDY SAVAGE

Randy Blankstein shares his quarterly report showing net lease cap rates increased for the sixth consecutive quarter. (Read Here)

Randy Blankstein, The Boulder Group

Up up and away: Cap rates in the single tenant net lease sector increased for the sixth consecutive quarter within all three sectors in the third quarter of 2023 to 6.51%. Single tenant cap rates increased to 6.27% (+10 bps) for retail, 7.41% (+14 bps) for office and 6.96% (+16 bps) for industrial in the third quarter. 

💰 THE MONEY SHOT

Blame J Pow: The persistent rise in interest rates further amplified the pricing dislocation in the net lease market between buyers and sellers. As the gap between buyers and sellers remains consistent, properties are sitting on the market longer. In the third quarter of 2023, the marketing time of net lease properties grew when compared to the prior year by 25% to more than eight months. Furthermore, the supply of net lease product on the market increased by approximately 10%.

DID SOMEONE SAY BJ

BJ's Wholesale Club is set to open its first-ever location in Alabama as part of its continued expansion in the Southeast. (Read Here)

BJ’s Wholesale

Sloppy Toppy: The new location, which also has an on-site BJ’s Gas, is the company’s 239th club and first-ever in the state of Alabama. BJ’s is opening in Alabama as it continues to expand in Tennessee, where it will open its third location, in Goodlettsville, early next year. 

💰 THE MONEY SHOT

Getting Around: Headquartered in Marlborough, Mass., BJ’s currently operates 238 clubs and 169 BJ's Gas locations. 

JACK IN THE CRACK

JIB recently opened its first location in Kentucky and also expanded into Salt Lake City within the past three months. (Read Here)

Jack in the Box

Franchisee commitments: The brand has secured a deal with veteran franchisees to open six new restaurants in the Louisville market. This demonstrates the ongoing confidence and commitment of franchise partners in Jack in the Box's growth strategy.

💰 THE MONEY SHOT

Continued nationwide expansion: Jack in the Box's expansion efforts extend beyond Kentucky and Salt Lake City, with plans for new locations in Orlando, Arkansas, Hawaii, Tennessee, Missouri, Texas, and California. The brand aims to broaden its presence and increase its market share across the country.

TRIPLE NET TENDIES

🧠 Thought Leader: Richard Berger shares how Realty Income identified value in Spirit portfolio

👂 Ear Hustle: The late Sam Zell with an absolute must-watch video

💎 Web Gem: Richard Berger shares why STNL transaction volume is thriving

NET LEASE NUGGIES

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