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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. 

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The Boulder Group

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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