What is a good cap rate for triple net property in California?

In Buying Property - Asked by T R. - Jul 27, 2014
Report Abuse
Answer this Question

Answer(s)

Sharon B.
Broker/Agent
Riverside, CA

My team works with investors who usually look for an average cap rate of 8%-10%. I would say if the property has potential, then a 7.5% would be a good place to start.

Jul 28, 2014
Report Abuse
T R.
Owner/Investor
Beverly Hills, CA

But on today market the cap rates for all the franchise triple net tenants came to 4 to 5% which does not make sense.

Jul 28, 2014
Report Abuse
Ludwig P.
Broker/Agent
Burbank, CA

I agree with both Sharon and John. 8% is good as an average. 8%+ is better. For nowadays, 7% is more practical, but is not for everybody.
But as John stated, existing 4-5% doesn't make any sense for domestic investors (some exceptions for 1031 exchange in this limited supply market). However, lot of international money is coming in, from China, Russia, UAE, etc. - all cash buyers, limited contingencies,....... you name it.

Aug 1, 2014
Report Abuse
Alex K.
Broker/Agent
Belmont, CA

It depends on the location and credit worthiness of the tenant. 4% to 8% is the typical range.

Aug 28, 2014
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question