An Introduction To NNN Investing
Retail Categories
The Investment
Types of Sellers
The Buying Process
Market Analysis
Highest and Best Use Explained
Location and Site Analysis
Financial Feasibility
Industry Trends
Due Diligence
Financing
Low Risks of Default
Sample Lease Agreement
Sample Letter of Intent
Sample Commercial Inspection Report
Industry Trends In Year 2014
The financial crisis of 2007-2008 precipitated a movement toward low risk exposure across all property types. For the retail sector, this has compressed cap rates down to 4.25%-5.12% for the highest credit tenants such a McDonalds and Walgreens. Due to these high prices and lack of supply, investors have showed interest in other retail segments like dollar stores, grocery, convenience and clothing.
The leaders in the dollar store segment are adding between 250-300 stores a year averaging $150-$170 square foot sales price up from the $130 range in 2012 while $320-$340 square foot sales price was the range for the premium drug stores such as Walgreens.
Fast food trends since 2012 have been generally up from $400 sales price per square foot range to $440 average, while cap rates have been trending down since 2012 from 7% to 6%
Convenience Stores with gas products have also trended up since 2012 from $650 sales price per square foot to $680-$700 and cap rates are down from the 7.5 % range to around 6.25%.