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Single Tenant Cap Rates Continue to Climb Amid Signs of Investor Activity

A narrowing gap between bid/ask rates could spur more deals ahead.

By Philippa Maister | January 03, 2025 at 06:02 AM

For the eleventh consecutive month, the single tenant net lease sector is seeing cap rates continue to climb, according to The Boulder Group’s net lease market report for Q4 2024. Nevertheless, it described hopeful signs of increased investor activity.

The spike in cap rates affected three sectors: retail, office and industrial. Single tenant cap rates increased to 6.52% (+2bps) for retail, 7.78% (+3 bps) for office, and 7.23% (+8 bps) for industrial. Overall, cap rates rose to 6.76% — three basis points higher than in the previous quarter. The report said the market continues to be negatively affected by high interest rates, as well as comments from the Federal Reserve following its December 2024 meeting, when it cut interest rates by just 25 basis points.

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