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Cap Rates Reach New Lows for Single-Tenant Net Lease
Cap rates in the single-tenant net lease sector reached a new historic low for all three asset classes in the third quarter of 2021, The Boulder Group reported. Cap rates for retail, office and industrial fell to 5.80%, 6.80% and 6.70% respectively.
“Significant investor demand combined with limited supply of quality net lease assets remains the primary driver of continued cap rate compression in the sector,” said Randy Blankstein, president, The Boulder Group. “Furthermore, during the third quarter, the 10-year Treasury yield decreased to its lowest levels since the first quarter of 2021.”
As pricing within the net lease sector remains at all-time highs, owners are taking advantage and adding properties to the market, according to The Boulder Group. Property supply increased by approximately 9% in Q3, driven by an increase in retail and office properties. Conversely, supply of industrial properties decreased by more than 11% during Q3.
- ◦Sale/Acquisition
