Industrial Net Lease Cap Rates Soar In Q2
How did the net-lease sector fare in the first six months of 2016? According to The Boulder Group's Q2 market report, retail net-lease cap rates remained steady between Q1 and Q2, while office caps rose 5% to 7.25%, and industrial net-lease cap rates increased an amazing 16%, from 7.1% in Q1 to 7.26% in Q2.
The spread between asking and closing prices for retail and office assets increased 2% and 9%, respectively, an indication owners are successfully taking advantage of the cap rate environment with aggressive pricing.
Another sign of strength in the market is an increase in net-lease assets being delivered. Total supply rose 11% in Q2, led by a 27% increase in office assets and a nearly 18% spike in industrial assets hitting the market. Q3 should be interesting to watch in the net-lease sector.