Overall single-tenant net lease cap rates decreased one basis point to 6.80% in the first quarter of 2026, according to The Boulder Group’s Q1 2026 Net Lease Research Report. Retail cap rates remained unchanged at 6.55% for the second consecutive quarter, while office cap rates compressed by 10 basis points to 7.90%. Industrial cap rates decreased five bps to 7.15%.
“The Federal Reserve’s decision to hold rates steady at both its January and March meetings, combined with inflation remaining above target, has pushed the expectation for meaningful rate relief further into the year,” said Randy Blankstein, president, The Boulder Group. “In that environment, the fact that net lease transaction volume has remained steady is an indication of how well-established the demand for this asset class has become.”
Net lease property supply decreased by 9.8% in Q2 from Q1. A key contributing factor was elevated sales transaction volume in Q4 2025, fueled in part by 100% bonus depreciation for certain asset classes. The transactional momentum carried into Q1 2026.
“The distinction between investment-grade credit and everything else is more pronounced than it has been in some time,” said Jimmy Goodman, partner, The Boulder Group. “Institutional buyers, 1031 exchange investors and private capital are all competing for the same pool of high-quality, long-term net lease assets, while product outside that profile is moving more selectively and at wider spreads. Sellers who understand that distinction are pricing accordingly and transacting.”
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