Net Lease Cap Rates Reach Record Lows

The Boulder Group

Net lease market cap rates remained at or near historic lows in every major sector in Q4, according to the latest report by The Boulder Group. Office cap rates across the country dropped 25 bps from 7.25% to 7%. Industrial caps dropped from 7.59% to 7.44%, a decrease of 15 bps. Single-tenant retail held steady at 6.25%.

Overall supply of net-leased assets decreased 11% between Q3 and Q4, with retail assets seeing the sharpest drop at 12.5%. Investor demand in single-tenant retail remained strong, despite the decline in cap rates over 2015.

The Boulder Group predicts the net least market will remain active in the early part of 2016, with limited movement in valuations moving forward.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's Chicago Newsletters
Related Stories

Fannie Mae, Freddie Mac Rewrite Underwriting Standards For NYC's Rent Freeze

Starwood Launches Residential Land JV Targeting $1B In Annual Originations

New Opportunity Zones May Help Finish California Projects, Not Start Them

Gaming & Leisure Stays Bullish On Bally's Casino Project Despite Delays

ISIF Commits €100M To IPUT's €500M Office Development Pipeline

Brookfield, CPP Complete $5.2B REIT Buyout, Pick Up U.S. Logistics Assets

TPG, ACORE Raise Billions For Opportunistic CRE Funds

Newmark Cuts Earnings Outlook Despite Record Third Quarter

Battered Mortgage REIT Suspends Dividend To Preserve Cash

Morningstar Releases New Details On Over 350K SF In Q3 Office Leases

Blackstone Mortgage Trust Reports Unexpected Q3 Net Loss

'Distress Is Finally Trading': Investors Chasing Big Discounts On Boston Office