While 2023 was not kind to net lease, things have been improving so far in 2024, particularly for single-tenant.

A new report from the Boulder Group says that in the second quarter of 2024, single-tenant net lease saw cap rates increase for the ninth consecutive quarter. That was for all three sectors, with retail hitting 6.47% (up five basis points), office up 7.67% (an increase of seven basis points), and industrial at 7.10% (eight basis points up).

Things have been improving since the middle of Q2. In May, Marcus & Millichap said single-tenant net lease was in good shape. They pointed to the continued strength of the labor market and says that has supported increases in retail spending beyond inflation for real growth. Real increases in wages also helped by giving people on average more money to spend after price inflation.

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