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Net Lease Cap Rates Continue to Stabilize
Cap rate stabilization in the single-tenant net lease sector continued in the fourth quarter of 2025, with overall cap rates increasing just one basis point to 6.81%, The Boulder Group said in its 4th Quarter Net Lease Research Report. Retail cap rates compressed modestly to 6.55% (-2 bps), office cap rates expanded to 8.00% (+10 bps), and industrial cap rates remained unchanged at 7.20%.
“This is the third straight quarter of a single basis-point increase for cap rates,” said Randy Blankstein, President, The Boulder Group. “Cap rates were largely unaffected in 2025 despite multiple rate cuts in the second half of the year.”
Added Jimmy Goodman, partner at The Boulder Group, “The slight cap rate movement in the fourth quarter of 2025 illustrates continued pricing stability supported by improving buyer-seller alignment following a period of more significant cap rate adjustment in prior years.”
The net lease market experienced a strong Q4 based on transactional volume, according to the report. Single-tenant net lease continues to benefit from its predictable cash flow and appeal to private and institutional buyers alike.
Investors will be monitoring cues from the Federal Reserve, as the Federal Open Market Committee was fairly divided following its December meeting. “If more cuts than expected occur, the single-tenant net lease market could experience significant tailwinds in the second half of 2026,” according to The Boulder Group. “However, lower interest rates will not explicitly mean lower cap rates going forward.”
- ◦Sale/Acquisition
