CHICAGO—During the past year, the cap rates for most single-tenant net-leased properties have hovered around historic lows, but in the final quarter, rates for retail and office sank even lower, according to a new report by The Boulder Group, a commercial real estate firm in suburban Chicago. In fact, its research shows retail and office rates hit their lowest levels in the past decade. However, cap rates for net-leased industrial properties did increase.

Rates for retail sank from 7.02% in the third quarter to 6.85% in the fourth, the data show, the first time in the past decade the sector's rate fell below 7.0%. Rates for office properties fell from 7.7% to 7.4%, also a decade low. And asking cap rates for industrials grew from 8.0% to 8.15%.

“Investors' perception was that cap rates would follow the rising interest rate climate; however this correlation did not occur,” the report notes. “Supply constraints remain a primary factor to the current cap rate levels within the net lease market.” Boulder officials believe that with so many institutional investors and real estate funds trying to hit year-end acquisition targets, the supply of available properties decreased. In addition, “investors were able to refinance at historically low rates which allowed single tenant property owners to hold rather than sell.”