Retail cap rates have increased across all sectors, with the dollar store and grocery sectors seeing rises of up to 23 and 19 basis points, respectively, B+E said in its latest net lease cap rate report. However, other sectors have experienced only minimal cap rate adjustments since the third quarter of 2024, with convenience stores remaining unchanged and QSR cap rates rising by just one bp.  

Since the end of August, there has been an increase in supply across all retail asset classes, the report stated. The casual dining, banking and convenience store sectors have experienced the largest supply increases, with rises of 21%, 20%, and 17%, respectively.

In contrast, the auto parts and pharmacy sectors saw the smallest growth in supply, with changes of 6% and 7%, respectively. Newly available listings make up 34% of the properties currently on the market. 

The industrial market has experienced a 28% increase in the number of available properties, with the distribution sector seeing a 27% rise. Major industrial players, such as FedEx, currently have 15 properties on the market, with an average cap rate of 6.55% and an average of 6 years remaining on the lease term. Among industrial property types, manufacturing facilities have seen the largest increase in cap rates, which have gone up 16 bps to 7.51% as of Q4. 

Among specialized property types, such as urgent care center and dialysis facilities, cap rates have compressed slightly since the end of Q3, according to B+E.

Wingspan Development Group announced that WDG Finance has closed the $16 million WDG GP Fund II, its second since 2021, to fuel the firm’s multifamily development business growth in Illinois, Wisconsin, and Florida.

Nearly 40% larger than WDG’s GP Fund I, with an average investment about 50% higher, the $16 million fund will participate in the equity of five ground-up projects: The Henry at Harms Woods in Skokie, Ill.; The Whitt in Riverview, Fla.; Wekiva Ranch in Apopka, Fla.; The Pabst Farm Development in Oconomowoc, Wisc.; and The Vue in Elk Grove Village, Ill. It will also fund a preferred equity position in NICHE in Tampa, Fla. All six properties are developed in partnership with Wingspan’s sister company, Nicholas & Associates, a full-service contractor.

Wingspan currently has nearly $900 million in multifamily assets, including over $350 million in stabilized assets and about $500 million in entitled projects under development across several Chicago suburbs, Southeast Wisconsin and Central Florida.

Net lease cap rates have risen again in the second quarter of 2024, with average caps increasing by 12 basis points quarter-over-quarter to 6.27%, B+E reported. Also up are the average times on the sale market, which increased by 0.8 months during Q2.

B+E’s Q2 cap rate report found that retail cap rates have risen by an average of 12 bps, with some sectors such as casual dining and dollar stores increasing by 21bps from Q1. However, cap rates for quality tenants such as McDonald’s remain relatively stable. Industrial cap rates increased by an average of 15 bps, with FedEx properties rising 39 bps to an average of 6.87%.

“The rise of the 10-year U.S. Treasury continues to put upward pressure on cap rates as investors face higher borrowing costs,” according to the report. “The [Federal Reserve] continues to cite inflation, better-than-expected economic growth and a tight labor market as factors leaving rates unchanged.”