NORTHBROOK, ILL. — Cap rates in the fourth quarter of 2016 for the single-tenant net lease sector increased or remained the same for office, retail and industrial assets, according to The Boulder Group’s quarterly Net Lease Market Research Report. Retail cap rates experienced their first increase since the third quarter of 2013 to 6.19 percent. The nine-basis-point increase is the largest quarterly increase in retail cap rates since the second quarter of 2011. Cap rates for the office sector remained unchanged at 7.08 percent, while the industrial sector increased by 3 basis points to 7.17 percent. The Boulder Group attributes the increase in cap rates for the retail sector to the rise of treasury rates during the fourth quarter. During the fourth quarter, the 10-year Treasury yield increased significantly to 2.45 percent, up from 1.62 percent at the start of the quarter. During the fourth quarter, the spread between asking and closed cap rates for retail properties increased by five basis points. This was the largest spread between asking and closed cap rates for retail properties since the fourth quarter of 2013. Cap Rates Likely to Rise More in 2017 The net lease market is expected to remain active in …
