Recently we’ve been reading more and more articles talking about increasing cap rates in the retail investment market, specifically the single-tenant segment.
Our initial reaction was that the Pacific Northwest market might not be experiencing the same cap rate decompression that was taking place nation-wide, however it was worth taking a closer look. Our research team analyzed nearly 500 single-tenant sales from 2014-2017YTD. We broke the single-tenant market into 8 separate categories which include Fast Food/Coffee Shops, Drug Stores and Causal Restaurants among others. Our initial reaction proved correct for 6 (almost 7) of the 8 categories. That means we are actually witnessing the 7th consecutive year of cap rate compression for the vast majority of single-tenant retail assets. The Pacific Northwest remains one of the healthiest single-tenant investment markets in the nation.