National + Net Lease | May 6, 2022

Cap rates for net-leased bank branches declined to 5.15% in the first quarter, according to the Boulder Group

Cap Rates Compress 20 BPs in Net Lease Banking Sector

National asking cap rates in the single-tenant bank ground lease sector decreased to 5.15% in the first quarter, according to the Boulder Group’s 2022 Net Lease Bank Ground Lease Report. This represented a 20-basis-point decrease year-over-year.

“The cap rate compression associated with the banking sector can be best attributed to overall market conditions in the net lease sector combined with an increase in supply of longer-leased properties,” said president Randy Blankstein.

Changing bank footprints and closings are a top concern for investors. According to S&P Global Market Intelligence data, almost 3,000 bank branch locations closed net of openings in 2021.

“3,000 closings sounds significant; however it represents less than 5% of the bank branches in the United States,” said partner Jimmy Goodman. “That being said, as digital banking continues to grab a larger share of transactions, investors will remain steadfast in investing in strong locations with above-average deposits.”

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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