C-Store Sector Report

C-Store Sector Report February 12, 2024

Investment volume and cap rates specific to the convenience store (C-Store) sector have held steady relative to peer asset classes. While a slight uptick in average cap rates was observed toward the close of 2023, this pales in comparison to other product types such as office buildings. An interesting observation is the deviance between C-Store cap rates and U.S. 10-Year Treasury yields, which have historically had a direct relationship.

The future of C-Store cap rates remains somewhat in a state of limbo. The Federal Reserve are still aiming to taper inflation, and with Wall Street beginning to price in multiple cuts to interest rates in 2024, cap rates should level out and begin to decrease over time. C-Store resiliency is due to the smaller price point of the transactions, the critical nature of use, and the push into the QSR sector. Cap rates and deal pricing will continue to vary depending on the specific asset and local market, making it critical to understand the underlying dynamics of even the smaller C-Store deals.

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