The third quarter saw a significant increase in supply for the single-tenant market, according to B+E’s Q3 cap rate report. The number of properties listed on the market rose by almost 19% from Q2 to Q3, reaching a total of 3,905. This surge can be attributed in part to a notable influx of new listings during this period.
According to the report, 1,236 properties were added as new inventory in Q3 – accounting for over 30% of the current supply. In comparison, only half as many listings were either sold or taken off the market during this time frame.
However, it is worth noting that approximately 15% of current listings have been sitting on the market for over a year. Of these long-standing properties, nearly half have cap rates below 5.50%. In contrast,the majority (73%)of recently listed properties have higher cap rates above this threshold.
B+E’s report also highlights challenges faced by investors seeking lower-cap-rate deals due to rising interest rates.Fewer than one-third (27%)of newly-listed properties are currently priced at or belowa5 .50 %cap rate.This trend indicates potential difficultiesin finalizing transactions at these levels.Additionally,the overall scarcity and competitiveness withinthe STNLmarket may further contribute towards limited availability and higher pricingfor desirable assets with lowercaprates.”
