Single Tenant Net Lease Report

Retail Performance Overview

For most of 2022, rising inflation and interest rates were a severe headwind to net leased properties. Upward pressure continues to weigh on cap rates as borrowing costs for both private and institutional investors increase. Single tenant cap rates increased to 5.95 percent, an increase of 9 bps, for retail, 6.95 percent (+15 bps) for office, and 6.65 percent (+4 bps) for industrial in Q4 2022. Despite this, investors value the strong nature of net lease retail and are planting their capital in safe, passive investments to ride out the quickly accelerating rates environment.  In this report, Matthews™  takes a look at data from 30+ tenants, including current on-market data for typical lease structures, key statistics, and transactions, providing you with insight into opportunities in the market.