Demand for NNN Properties Putting Downward Pressure on Cap Rates
Call it a case of the incredible shrinking cap rates. (Wasn't that Sherlock Holmes mystery?) Hanley Group SVP Eric Wohl tells us that the buyer pool for triple-net properties is growing. 1031 exchange buyers, private investors, and large institutions are all actively pursuing triple-net investments to take advantage of yield, tax benefits, and low management responsibility, he says. The demand is driving cap rates down for net-lease properties, whose inventory is lacking. Eric recently closed on the sale of sale of eight single-tenant NNN properties in Florida, Alabama and Nevada, totaling nearly $24M, including the pictured Circle K in Henderson, Nev., which traded for 6.7% cap rate, and a Florida Kohls ground lease that traded for 6.2%, which Eric calls one of the lowest cap rates for a single-tenant Kohls ground lease in the last 12 months.
