The Boulder Group releases second-quarter net-lease research report

Cap rates in the single-tenant net-lease sector increased for the fifth consecutive quarter to 6.40 percent, a 13 basis point (bps) increase compared to the prior quarter, according to The Boulder Group in its second-quarter net-lease research report.

When broken down into sectors, single-tenant cap rates increased to 6.17 percent (+12 bps) for retail, 7.27 percent (+27 bps) for office and 6.80 percent (+3 bps) for industrial in Q2 2023.

“The rise in interest rates combined with available investment returns in other fixed income investment opportunities continue to be the primary drivers for the upward pressure on cap rates,” said Randy Blankstein, president, The Boulder Group. “Accordingly, transaction volume for the first half of 2023 significantly lagged prior years’ pace.”

The supply of properties in the market is increasing as properties sit on the market longer. New properties added to the market in the second quarter of 2023 was significantly lo