A Game-Changer For Single-Tenant Assets in Miami?
The sale of single-tenant assets in Miami – often a favorite of foreign investors – has decreased by 20 percent in the last 12 months, according to a recent report by Marcus & Millichap. The drop in sales followed the best four-quarter period since the recession. The demand for single-tenant properties has slowed since the dollar began to gain strength against other currencies. Coincidence? But despite the sales slowdown, the average price per square foot climbed 2 percent to $454 per square foot as investors focused on high-quality listings tenanted by nationally recognized restaurant, pharmacy and grocery brands, according to the report. Well-located Red Lobster and Olive Garden locations traded on average at $735 per square foot. Walgreens and CVS assets averaged a $60 premium. The average cap rate held stable over the last year, ending March at 5.3 percent. Highly-regarded Miami Beach properties traded in the mid-2 to low-4 percent range while newer construction in Miami averaged a first-year yield of 5.5 percent. Looking ahead, a large influx of new properties will motivate buyers in Miami as investors are encouraged by strong economic and demographic trends.
Read full report here: MM Retail Report 2Q16