In the second quarter, cap rates in the single-tenant net-lease sector rose slightly after hitting historic low levels in the previous quarter, according to The Boulder Group in its second quarter net-lease research report.
Single tenant retail cap rates increased by 11 basis points to 6.02 percent while industrial increased by 18 basis points to 6.89 percent. Office cap rates remained unchanged.
“Following a quarter of historic pricing for the net-lease sector, owners of lower-quality assets brought properties to the market in attempt to take advantage of current cap rate levels,” said Randy Blankstein, president of The Boulder Group. “The increased concentration of lower-quality assets was the primary contributing factor for the rise in cap rates.”
Despite a decrease of approximately three percent in supply of net lease assets, lower quality assets (i.e., short-term leases and less desirable tenant credits) made up a larger concentration of the market
