The insatiable investor appetite for fast food restaurants persists, as evidenced by the increasing volume and average price of sales in 2013. Cap rates averaged 6.9% for fast food transactions in the third quarter of 2013, compared to an average of 6.5% in the second quarter, and 7% a year ago. Upper-tier fast food properties are generally moving with cap rates below 6% nationally; with some higher quality assets in great locations with more desirable long-term tenancies in place (e.g., McDonald’s, Jack in the Box, Chick-Fil-A, In-N-Out) trading at sub-5% cap rates. Nationally, middle-tier fast food properties are averaging 6-8% cap rates, and lower-tier and/or value-add properties are generally trading at cap rates above 8%. However, despite current demand, expect cap rates to increase by the latter part of 2014, as interest rates rise.