Net Lease Auto Parts Sector Faces Disruption

Net Lease Auto Parts Sector Faces Disruption

While high-quality auto parts stores remain in demand among net lease investors, the industry is facing competition from retail giants like Amazon, observes The Boulder Group President Randy Blankstein.

Cap rates for the single-tenant net leased auto parts store sector increased by 29 basis points (bps) from the fourth quarter of 2016 to the fourth quarter of 2017 to 6.19 percent, largely driven by the change in market supply of auto parts stores and the continued disruption Amazon has brought to this sector. During the same period, the overall net lease retail market compressed by 12 bps. The auto parts sector, for the purpose of this report, is defined as Advance Auto Parts, AutoZone and O’Reilly Auto Parts, as they account for the highest percentage of single-tenant transactions of properties occupied by auto parts retailers.

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Net Lease Auto Parts Sector Faces Disruption

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The Boulder Group is a boutique investment real estate service firm specializing in single tenant net lease properties. The firm provides a full range of brokerage, advisory, and financing services nationwide to a substantial and diversified client base, which includes high net worth individuals, developers, REITs, partnerships and institutional investment funds./

Founded in 1997, the firm has arranged the acquisition and disposition of over $2.1 billion of single tenant net lease real estate transactions. In 2010-2014, the firm was ranked in the top 10 companies in the nation for single tenant retail transactions by Real Capital Analytics. The Boulder Group is headquartered in suburban Chicago

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