**Net Lease Cap Rates Rise for 12th Consecutive Quarter**
Cap rates in the single-tenant net lease sector climbed for the 12th straight quarter in Q1 2025, according to The Boulder Group’s latest Net Lease Research Report. Overall cap rates increased to 6.78%, marking a two-basis-point rise from the previous quarter. By sector, single-tenant retail cap rates rose to 6.56% (up 4 bps), office cap rates to 7.80% (up 2 bps), while industrial cap rates remained steady at 7.23%.
“The persistent upward trend in net lease cap rates now spans three years,” said Randy Blankstein, President of The Boulder Group. “This is reflective of sustained high borrowing costs and inflationary pressures.”
The availability of single-tenant properties rose by more than 5% quarter-over-quarter, and inventory has increased nearly 30% over the past two years. This growth is attributed to decreased transaction velocity and a continued pricing gap between buyers and sellers.
“Of all the net lease sub-sectors, the drugstore sector is experiencing the slowest transaction volume and a glut of supply,” noted Jimmy Goodman, Partner at The Boulder Group.
