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 rlorey@calkain.com. Build Your Own Vacation Giveaway THE CCIM FOUNDATION’S MAJOR FUNDRAISER FOR 2017 Two lucky winners will each receive a $5,000 voucher for a dream vacation. You choose your destination, your itinerary, and your timetable. CCIM Institute members can enter to win by donating $100 or more, to the CCIM Foundation. Winners will be announced at the CCIM Fall Governance Meetings in Toronto, Oct. 14-18. You do not need to be present to win! Contact info@ccimef.org to get your donation form. Prizes sponsored by: Your donation will be tax deductible to the extent allowed by the law.The CCIM Foundation is a 501(c)(3) nonprofit organization. CCIM.COM May | June 2017 15