Net Lease Cap Rate Movement Signals Market Stabilization
Net lease cap rate activity remained relatively stable across property sectors during the third quarter of 2025, according to a recent report from The Boulder Group. Average cap rates for retail properties held steady at 6.57%, office cap rates rose slightly by five basis points to 7.90%, and industrial cap rates saw a modest compression of three basis points to 7.20%.
“This minimal movement in cap rates reinforces the market stabilization observed in the second quarter of 2025,” said Randy Blankstein, president of The Boulder Group. “Following two years of cap rate expansion, participants in the net lease sector appear to be adapting to the current capital markets.”
The report also highlighted stability in the market’s supply during the third quarter. Overall inventory of net lease properties declined marginally by 0.5%. Retail and office property availability decreased by 1.4% and 1.1% respectively, while industrial property listings increased by 6%, indicating a rise in seller activity.
“Consistency in cap rates and market supply suggests greater alignment between pricing expectations between buyers and sellers,” added Jimmy Goodman, partner at The Boulder Group.
Pictured: A Lowe’s store in Framingham, MA, which traded at a 6.76% cap rate during Q3, closely aligning with the sector’s average retail cap rate of 6.57%.
