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

In Buying Property - Asked by T R. - Jul 27, 2014
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Sharon B.
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
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T R.
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
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Ludwig P.
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
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Alex K.
Belmont, CA

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

Aug 28, 2014
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