Except for the colapse created by the Great Financial Crisis in 2009 and the Pandemic in 2020, the annual volume of large retail property sales transactions (those totaling $15M or more) has on the whole oscillated widely from one long-term trend period to the next.
However, in those years when a large volume of projects trade, they do so at significantly lower cap rates. In 2005, the average large transaction traded for a 7% cap; today, those projects are trading for a 5% cap. We project cap rates will continue this downward trajectory and dip below 5% in 2022, possibly signaling a period of an irrational exuberance.