Urban Retail Properties News
Urban Retail Properties The Hottest Deals in Real Estate!
The
market for urban retail properties has witnessed a sharp resurgence in the past
couple months. In-fact, we are seeing cap rates and prices that are reminiscent
of the markets heyday back in 2005-2007. There is such a strong demand for
these properties that they are routinely receiving multiple offers. This trend
is being fueled by a number of factors such as inherently strong real estate
quality, low interest rates, and a surplus of investors willing to deploy
capital.
It is no
secret that a great deal of the net lease market’s recent success is due to the
security it offers investors. Net lease properties offer investors reliable
income streams with little to no active management. These qualities are only
enhanced in the context of urban condos. Unlike properties located in tertiary
markets, urban retail can depend on higher foot traffic and a greater intrinsic
value. This serves to add an extra layer of security to the investment – should
a tenant leave it will not be hard to replace them.
Investors
know this and are actively seeking these properties. Low interest rates coupled
with a surplus of capital (that had previously been sitting on the sidelines)
have led to a perfect storm of rising prices and falling cap rates. Likewise,
many sellers are reluctant to sell because they would face the same problem in
redeploying their capital. As demand continues to gain momentum it is likely
investors will dig even deeper for tenant and location, resulting in downward
pressure on cap rates.
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