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Net Lease Cap Rates Reach Historic Lows
Cap rates in the single-tenant net lease sector reached historic lows for all three asset classes—retail, office and industrial—in the first quarter of 2022, the Boulder Group reported. Single-tenant cap rates compressed by 13, 10, and 17 basis points in retail, office and industrial, respectively. Cap rate compression continues to be derived from the significant demand for net lease properties across all investor classes.
“Following record transaction volume in 2021, net lease sales velocity continued in the first quarter of 2022,” said Randy Blankstein, president, The Boulder Group. He added that Q1 transaction volume was up more than 10% from the year-ago period.
Despite the record transaction volume in 2021, the overall net lease property supply declined by more than 5% in Q1.
“Supply chain issues and delayed expansion plans for retailers related to COVID-19 limited new construction supply,” said partner Jimmy Goodman. “Only 15% of net lease retail properties on the market were constructed in 2021 or 2022.”
- ◦Sale/Acquisition
