When pursuing properties with single-tenant leases, Marcus & Millichap VP Zach Taylor tells us he’s starting to see more aggressiveness from REITs and foreign capital and not just private clients hoping to benefit from a 1031 exchange. These additional demand drivers are keeping pricing for single-tenant properties at record levels, which is causing additional CAP rate compression for multi-tenant shopping centers from investors seeking additional return. He adds that as long as we do not see significant wage growth cause inflationary pressure, and we continue to see volatility in the bond markets overseas, there should be no significant uptick in long-term interest rates anytime soon. Zach is forecasting at least three, maybe five, more years of this cycle. However, it’s not purely a sellers’ market as buyers will continue to benefit from low interest rates, improving fundamentals and rent growth in all major markets, and additional choices with new inventory coming to market every day. For more info on our Bisnow partner, click here.
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