The net lease sector mostly held steady through the end of 2016, according to The Boulder Group's Q4 net lease market report. The most notable change in an otherwise consistent market: retail net-lease cap rates rose to 6.19%. That's the first cap rate increase for the segment since Q3 2013, and the nine basis point hike is the largest since Q1 2011.

The report indicates the Fed's decision to raise interest rates last month was a factor. 10-year Treasury yields spiked to 2.45% from 1.62% in October, which led net lease investors to more carefully monitor valuations. The spread between asking and closed cap rates for retail net lease assets rose five bps during the quarter.

Other takeaways from the report: industrial cap rates rose slightly, by three bps to 7.17%. And the spread between asking and closed cap rates for industrial, retail and office net lease assets climbed by 32 bps. Overall net lease sector supply decreased 8% from Q3 to Q4.

Investor demand will likely remain strong heading into the new year, but buyers will be more discerning in their opportunities in the early weeks of 2017. Expect further upward movement of cap rates as we dive deeper into Q1.