According to the latest net lease cap rate report from B+E, there has been an increase in retail cap rates across all sectors. The dollar store and grocery sectors saw the largest rises of 23 and 19 basis points, respectively. However, other sectors have only experienced minimal adjustments since Q3 of 2024. Convenience stores remained unchanged while quick-service restaurant (QSR) cap rates rose by just one basis point.
The report also noted a rise in supply for all retail asset classes since August. Casual dining, banking, and convenience stores saw the largest increases at 21%, 20%, and 17% respectively.
On the other hand, auto parts and pharmacy sectors had smaller growths in supply with changes of only six percent for both categories. Currently available listings make up about one-third (34%) of properties on the market.
In terms of industrial properties, there has been a significant increase in available properties by approximately twenty-eight percent (28%). The distribution sector specifically saw a twenty-seven percent rise as well. Major players like FedEx currently have fifteen properties on offer with an average cap rate of around six-point-five-five percent (6.55%)and an average remaining lease termof six years.
Among different types within industrial property types such as manufacturing facilities,the highest increase was seenin theircap rates which went up sixteen bps to seven-point-fifty-one-percent(7/51%).
However,B+E reported that specialized property types like urgent care centersand dialysis facilitieshave slightly compressedcapratesince Q3 ended last year.In summary,caprate expansion continuesfor net leaseretailandindustrialproperties accordingtoB+E’slatestreportonthe matter.
