The Hattiesburg commercial real estate market and the national market have been enhanced by the stock market woes. Market conditions were compounded by the Fed rate hikes, which begin in March of this year. Normally, the market conditions would negatively impact commercial real estate thus producing lower values. A somewhat unusual phenomenon has appeared to have happened, and the cap rates are lower than what would normally be expected, producing higher values. Our market values, in part, have remained high due to investors from out of market investing. By mid-year 2021, we began seeing investors from California, New York, and Texas looking to purchase real estate investments in our market. Our market, by most measurements, is considered a third tier or greater market, which is not usually on most investors' radars. Good real estate investments are becoming more difficult to make the deals work. We are being influenced by these prospective investors that they are looking at many smaller markets due to higher taxes, cost of construction, ability to work at home, and high crime rates in larger cities. As a result, the Hattiesburg market has showed up on their radar which has increased the market activity in our area.
Many community banks are flush with capital, and are looking for safe investments. Thus, the interest rates charged by the local banks are in the 6.5%-7% range depending on the quality of the guarantors and their income. In the London & Stetelman office, we have been a part of 1031 exchanges ranging from apartments and Dollar General stores with triple-net leases, to well-located office buildings. One of the consistent hot spots in retail property that we've assisted clients with is between Highway 49 and Interstate 59. We have sold three locations within the last six months and have a contract on another.