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Net Lease Cap Rates Stabilize in Q2 2025
Cap rates for single-tenant net lease properties experienced minimal changes in the second quarter of 2025, with overall cap rates increasing just one basis point to 6.79%, the Boulder Group said ini ts 2nd Quarter Net Lease Research Report. Retail cap rates edged up slightly to 6.57% (+1 bp), while office cap rates increased to 7.85% (+5 bps). Industrial cap rates remained unchanged at 7.23% for the second consecutive quarter.
“This modest increase in cap rates illustrates a change from the more pronounced upward trajectory experienced from 2022 to 2024,” said Randy Blankstein, president, The Boulder Group. “This suggests the market may be stabilizing after three years of consistent cap rate increases.”
The plateauing of cap rates can be best attributed to the combination of the Federal Reserve holding rates steady in 2025, investor adjustment to the current interest rate environment and market stabilization following three years of cap rate expansion.
“Transaction activity in the second quarter demonstrated a pronounced flight to credit quality, with premium tenants commanding cap rates lower than the market averages,” added Jimmy Goodman, partner, The Boulder Group.
- ◦Sale/Acquisition
