MarketSnapshot: Multi-tenant retail

The multi-tenant retail sector recorded $14.1 billion in third-quarter sales volume, a 9.1% decrease from the prior quarter. Compared to the same period last year, sales volume was down 9.9%.

The Southeast led the nation in sales, accounting for $3.7 billion or 26.1% of the nationwide total. This was trailed closely by the West, where $3.6 billion in sales took place, accounting for 25.6%. The Southwest recorded $2.4 billion in volume, or 16.8%, while the Northeast contained 13.4% of volume at $1.9 billion. The Midwest represented $1.7 billion in volume, or a share of 11.8%, and the Mid-Atlantic trailed, recording $0.9 billion, or 6.4% of nationwide volume.

The average cap rate increased 2 basis points in the third quarter to 7.08%. Compared to one year earlier, cap rates were up 6 basis points. The average cap rate in the Southeast declined 10 basis points from the prior quarter to 6.92%. Year over year, cap rates are down 30 basis points in this region.

Private buyers are responsible for 60% of multi-tenant retail acquisitions this year, followed by institutional buyers at 22%. REITs were responsible for 8% of acquisitions, while international buyers made up just 6%.