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Treasuries Push Down Net Lease Cap Rates

“The ten-year treasury rate and the net lease market are highly correlated, and during the third quarter the treasury yield reached 2.06.

By Brian J. Rogal | brianjrogal | Updated on October 04, 2017

chi-boulderQ304Photo The rates for retail properties now stands at 6.11%, a decrease of 12 bps in the past quarter

CHICAGO—Cap rates in the net lease market sank to historic lows at various points in the past few years, but after a relatively short period of stability, investors eager to snap up these properties have pushed rates down again.

The rates for retail properties now stands at 6.11%, a decrease of 12 bps in the past quarter, according to a new report from the Boulder Group, a net lease firm in the Chicago suburbs. This represented the lowest level in the net lease retail sector since the third quarter of 2016 when cap rates were at a historical low of 6.10%. Cap rates for net lease office and industrial properties decreased by 16 and 10 bps to 6.98% and 7.27% respectively.

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