In the first quarter, national asking cap rates in the single-tenant bank ground-lease sector decreased to 5.35 percent, according to the 2021 Net Lease Bank Ground Lease Report. This represented a 12-basis-point decrease when compared with the prior year.
“The cap rate compression associated with the banking sector can be best attributed to the investment grade credit of the tenants and the low interest rate environment,” said Randy Blankstein, president, The Boulder Group.
In the first quarter of 2021, bank properties with leases in excess of 18 years commanded cap rates of 4.3 percent, a 10-basis-point decrease from the prior year. Bank properties with the longest leases typically display attractive traits, including relocation branches and modern prototypes.
“Long-term leased bank branch properties remained in the highest demand amongst investors,” added Jimmy Goodman, partner, The Boulder Group. “Consequently, these properties experien
