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3.35% cap rate - #WTF Why and Who would pay this? - NNN Ground Lease

Why would anybody pay 3.35% cap rate for this deal?

Beats me.

You can get a McD's for 4%+ cap rate.  This is not even Dallas or Houston or Austin.  It is San Antonio.

$4.5M for less than an acre of land.  No improvements.

Yes a 20 year lease with bumps: 10% every five years. Maybe they can advertise it on the "average cap rate" (which is bogus because cap rate is a year one measure). But.... 10 year average is 3.885%.  Maybe we can add in the 6 options.... wow now we are really talking... I mean dreaming....

Would you buy this?

None of my clients would.

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