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Cap Rates Continue Expansion for Net Lease Retail, Industrial Properties
Retail cap rates have increased across all sectors, with the dollar store and grocery sectors seeing rises of up to 23 and 19 basis points, respectively, B+E said in its latest net lease cap rate report. However, other sectors have experienced only minimal cap rate adjustments since the third quarter of 2024, with convenience stores remaining unchanged and QSR cap rates rising by just one bp.
Since the end of August, there has been an increase in supply across all retail asset classes, the report stated. The casual dining, banking and convenience store sectors have experienced the largest supply increases, with rises of 21%, 20%, and 17%, respectively.
In contrast, the auto parts and pharmacy sectors saw the smallest growth in supply, with changes of 6% and 7%, respectively. Newly available listings make up 34% of the properties currently on the market.
The industrial market has experienced a 28% increase in the number of available properties, with the distribution sector seeing a 27% rise. Major industrial players, such as FedEx, currently have 15 properties on the market, with an average cap rate of 6.55% and an average of 6 years remaining on the lease term. Among industrial property types, manufacturing facilities have seen the largest increase in cap rates, which have gone up 16 bps to 7.51% as of Q4.
Among specialized property types, such as urgent care center and dialysis facilities, cap rates have compressed slightly since the end of Q3, according to B+E.
- ◦Sale/Acquisition
