Cap rates on single-tenant net lease properties grew again in the last quarter of 2023, according to The Boulder Group. All three main groups — industrial, office, and retail — saw increases, though far from evenly. They rose eight basis points for to 6.35% for retail, four basis points to 7.00% for industrial, and 14 basis points to 7.55% for office.

"Cap rates continued to rise in the fourth quarter as asset pricing has not caught up to the massive increase in borrowing costs over the past year," they wrote. "Furthermore, there is a lack of 1031 buyers causing property supply to increase." The number of overall properties went up from 3,662 to 4,085 between Q3 and Q4, a 11.6% increase. The retail sector went from 2,753 to 3,103, or 12.7%. Industrial, from 382 to 417, or 9.2%. And office, from 527 to 565 or 7.2%.

The asking versus closed cap rate spread increased from 30 to 31 basis points in retail (1 point), 25 to 32 for industrial (7 points), and 55 to 67 for office (12 points). The differences between buyers and sellers went up, a contrast from the contraction that JLL recently said it had found in the market overall.