In the third quarter of 2023, for the 10th consecutive quarter, cap rates for single-tenant net lease properties increased quarter-over-quarter in retail, office, and industrial. The amounts were small: 3 basis points in retail (6.47% to 6.50%), 8 basis points for office (7.76% to 7.75%), and 5 basis points for industrial (7.10% to 7.15%), according to data from The Boulder Group.

The blended cap rate increase was 3 basis points (6.70% to 6.73%). It shows that the biggest influence on average cap rates came from retail.

The primary reason for the long-standing increase in cap rates, according to Boulder, is sustained high interest rates. Additionally, a shortage of transactions over time — also driven by interest rates — has contributed to excess inventory.