News

Report: QSR median lease cap rate lowest in western markets

August 8, 2014

The Boulder Group's Research Department has published a new report providing analysis of the activity in the national net lease QSR market.

Among the report's findings include:

• The QSR media asking cap rate by region is: West 4.85 percent; Mountain, 6 percent; South, 6 percent; Midwest, 6.38 percent; and Northeast, 6.5 percent.
• QSR properties are commanding a 50 basis point premium over the retail net lease market.
• McDonald's ground leases represent the lowest cap rates in the sector (4 percent) driven by their high credit ratings, longterm leases, low price points, reoccurring rental escalations and long operating histories.
• Cap rates for corporately guaranteed properties are asking a 50 basis point premium over franchisee guaranteed properties.
• The report says the single tenant net lease QSR sector will remain active, "as the lower price points and rental escalations affiliated with this asset type continue to attract private investors."
• The median asking price for all QSR properties is about $1.7M.

The full report is available online.