Commercial Investment Real Estate May/June 2017 | Page 17
Single-Tenant Net-Leased Cap Rates vs. 10-Year
Treasury Rates
STNL Cap Rates
10-Year Treasury Rates
Spread
8%
7
6
5
4
3
2
1
0
Q3
Q4
Q1
2012
Q2
Q3
Q4
Q1
2013
Q2
Q3
2014
Q4
Q1
Q2
Q3
Q4
Q1
Q2
2015
Q3
Q4
2016
Source: Calkain Research
Real estate investors seem willing to consider second-tier cities
in their search for solid yields.
With the corporate bond market yields still in the 2-percent
range, the tendency will be to mitigate upward pressure on the
real estate yields.
The Federal Reserve may raise interest rates by as much
as 2 percent during 2017, which will cause triple-net leased
property cap rates to rise only slightly since that expectation
is built into the market. While there may be slight adjust-
ments, the triple-net lease market will continue a fairly
steady course this year.
Ryan Lorey, CCIM, is a director at Calkain Companies in
Herndon, Va. Contact him at [email protected].
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