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Research - AUGUST 27, 2021

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Cap rates for single-tenant QSR properties reach historic low

by Andrea Zander

In the second quarter, national asking cap rates in the single-tenant quick-service restaurant (QSR) sector decreased to a new historic low of 5.26 percent, according to the 2021 Net Lease QSR Market Report by The Boulder Group. This represented a decrease of 39 basis points from the same period in the prior year.

“Cap rates for corporate-leased QSR properties declined by 20 basis points to 5 percent, while QSR properties leased to franchisees declined by 43 basis points to 5.4 percent,” said Randy Blankstein, president, The Boulder Group. “The primary contributing factor to the decline in cap rates is related to the increased investor demand for net-lease properties with a drive-through component.”

Demand for net-lease QSR properties outpaced the overall net-lease sector in the past 12 months. The premium associated with net-lease QSR properties was 76 basis points in second quarter 2021 versus a spread of 60 basis points in second quarter 2020.

“Foll

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