7/15/2009: CIA Commercial Investment Advisors

Over the 12 months ending March 31, single-tenant retail sales volume totaled $1.5 billion, 10% of retail assets, a 56% decrease from the prior 12 months. Single-tenant retail sales fell in Q1’09 to $84 million, 62% of Q4’08 volume and 87% YOY (year over year). While single-tenant retail sales have been hit very hard, multi-tenant retail fell only 76% versus the prior 12 months. Single-tenant retail property sellers have been achieving 93% of their asking price.

On a per-square-foot basis, average pricing for single-tenant retail was up 2% vs. a 3% increase for multi-tenant. Cap rates for both moved in the same direction with single and multi-tenant retail up 62 and 53 bps, respectively. As retail bankruptcies grow, those multi-tenant assets that do trade are commanding increasing prices as investors seek the security of a diverse tenant base. However, prime single-tenant properties continue to command premium pricing with the top 25% of properties priced near or above $400 per square foot, with sub-6% caps not uncommon.

Private investors comprised the largest buyer group, acquiring 45% of single-tenant retail property on a dollar volume basis but have become net sellers. The Northeast was the most active region, with $349.5 million in sales; only one market, Manhattan, with $230M in sales, surpassed the $200M mark.

Based on independent reports of properties and portfolios $5 million and greater. Data believed to be accurate but not guaranteed.