Cap rates in the single-tenant net lease sector rose slightly in fourth quarter 2021, following historic low levels reached in third quarter 2021, reported The Boulder Group in its Fourth Quarter Net Lease Research Report.
Cap rates for retail and industrial increased slightly to 5.88 percent and 6.77 percent respectively. Cap rates for net lease office remained unchanged at 6.80 percent.
“Low interest rates and substantial amounts of investment capital chasing stable yields created an active net lease market throughout 2021,” said Randy Blankstein, president, The Boulder Group. “Net lease transaction volume in 2021 exceeded $90 billion, a new record for the net lease sector.”
A limited supply of net lease properties with attributes that command low cap rates (long-term leases, primary market locations, investment grade tenants, etc.) was the main factor for the change in cap rates. Overall, property supply in fourth quarter 2021 increased by mo