Supply of assets across all classes has increased since the end of August, with more than a third of properties currently on the market comprising newly available listings, according to B+E’s January cap rate report. Casual dining led all sectors with a 21% increase in supply, followed by banking at 20% and convenience stores at 17%.
Among casual dining assets, Pizza Hut had the most properties on the market, with 67 locations holding an average term of 13.3 years and an average price of $1.3 million. Bob Evans, IHOP and Panera Bread each had 21 locations on the market.
Chase Bank led the banking sector with 29 properties on the market with an average term of 11.5 years and an average price of $3.7 million. Bank of America had 19 locations on the market with an average lease of 7.4 years, and Fifth Third Bank had 10 locations on the market with an average lease of 17.1 years.
Among convenience stores, 7-11 had 116 locations on the market with an average lease of 11.8 years and an average price of $6.2 million. Circle K had 54 locations at an average cost of $3.7 million, and Wawa had 36 assets available at a median of $6.1 million.
Auto parts stores and pharmacies saw the smallest supply growth at 6% and 7% respectively, the report found. Take 5 had the most locations on the market at 103. Advance Auto Parts had 44 locations available and O’Reilly Auto Parts had 28 locations on the market. Within pharmacies, Walgreens had 306 locations on the market with an average lease of 8.6 years. CVS Pharmacy had 134 locations available and Rite Aid had 31 available.
Retail cap rates increased across all sectors, with the dollar store and grocery sectors seeing cap rate increases of up to 23 and 19 basis points respectively, B+E said. Other sectors have only had minimal cap rate adjustments since the third quarter. Convenience stores remained unchanged and QSR cap rates increased by only one bp.
The industrial market experienced a 28% increase in available properties, led by the distribution sector at 27%. FedEx had 15 properties on the market with an average cap rate of 6.55% and an average of six years remaining on the lease term. Amazon had four properties on the market at an average price of $15 million.