Cap rates remain at low levels due to the historically low interest rate environment combined with a robust economy. Despite the decrease in cap rates, the spread between asking and closed cap rates for retail and office properties widened by 6 and 2 basis points respectively.

Real estate investors believe we are in the late stages of the real estate cycle with fewer buying opportunities, especially those of high quality. In the fourth quarter of 2019, the net lease market experienced a decrease in property supply of approximately 10 percent. Regardless of the decrease and limited quality supply in the fourth quarter of 2019, transaction volume for 2019 is expected to surpass 2018 by a significant margin.

Commercial Property Executive