**Net Lease Cap Rates Stabilize in Q2 2025**
Cap rates for single-tenant net lease properties showed minimal movement during the second quarter of 2025, according to The Boulder Group’s Q2 2025 Net Lease Research Report. Overall, cap rates ticked up just one basis point to 6.79%.
Retail properties saw a slight increase in cap rates to 6.57%, up one basis point. Office properties experienced a more notable rise, with cap rates climbing five basis points to 7.85%. Meanwhile, rates for industrial properties remained steady at 7.23% for the second consecutive quarter.
“This modest increase in cap rates illustrates a change from the more pronounced upward trajectory experienced from 2022 to 2024,” said Randy Blankstein, President of The Boulder Group. “This suggests the market may be stabilizing after three years of consistent cap rate increases.”
The reported stabilization is largely due to the Federal Reserve maintaining interest rates in 2025, along with investors adapting to the current interest rate environment and broader market conditions stabilizing after several years of volatility.
Jimmy Goodman, Partner at The Boulder Group, added, “Transaction activity in the second quarter demonstrated a pronounced flight to credit quality, with premium tenants commanding cap rates lower than the market averages.”
The report indicates cautious optimism in the net lease market, signaling a potential turning point after years of rising cap rates.
