We are now seeing some high quaility TIC's at higher cap rates.We are seeing locations like Hollywood that were previously unattainable due to prohibative costs to income ratio's. An aquisition person recently stated " we now have a front row seat to see who's going to make it out there and who is'nt". That goes for corporate tennants, REIT's and TIC sponsors.

 Don......it's definitely becoming a "tenant driven" market and Landlords are very concerned.  Below is the summary that CoStar delivered as their take on rising cap rates:

• In fourth-quarter 2007, 180 closed transactions of Class A office sales of more than $5 million were recorded, trading at an average actual cap rate of 6.1% nationally. By the last three months of 2008, the average cap rate spiked to 7.6% on just 80 transactions, including a jump of more than 100 basis points between the third and fourth quarters. With sales results for the quarter still being collected, CoStar had recorded 42 closed transactions at an average actual cap rate of 7.9% as of March 18.



• Investors closed 279 sales of Class A and B warehouse and distribution property in the fourth quarter of 2007 at an average cap rate of 7.1%. The number of transactions dropped sharply in fourth-quarter 2008, with the cap rate rising 100 bp. First-quarter 2009 is continuing to trend toward a sharp drop in transactions, with the cap rate edging up another 50 bp to a preliminary 8.6% as of March 18.

• The apartment sector, a look at sales totaling $5 million or more shows that 629 Class A properties exchanged hands in fourth-quarter 2007 at an average actual cap rate of 5.9%. For the same period a year later, 355 transactions sold and the average cap rate rose 90 basis point to 6.8%, thanks to a 50-bp jump between the third and fourth quarters. Though deal volume appears to be again dropping sharply in the first quarter, the cap rate for closed transactions was holding steady at 6.8% in the quarter to date -- the only major property category to hold the line on cap rate expansion.

 I hope we get this economy going again and investors back in the market (not fire sale buyers) and the commercial lending active again for main street.  Thanks for your comments and let's stay tuned....