Single-tenant investment sales fell in the third quarter to $9.9 billion, a 10.5% decline from $11.05 billion in Q2 and a 14% drop from $11.62 billion in Q3 2024, according to Northmarq’s Q3 Single-Tenant Market Report. Year-to-date volume stands at $33.3 billion, compared with $48.22 billion for the full year 2024 and $107.34 billion in 2021, highlighting the market’s recent moderation.
Industrial properties continued to dominate single-tenant sales, accounting for 52.2% of transactions, or $5.2 billion, during the third quarter. However, the sector’s share has declined from 60.2% a year ago, when industrial sales totaled $7 billion. Office properties represented the next largest segment, with $2.5 billion in sales or 25.6% of total deal volume, up from 17% last year, when office sales totaled $1.98 billion. Retail properties accounted for $2.2 billion, or 22.3% of the quarter’s transactions, slightly down from 22.7% in Q3 2024, when retail sales totaled $2.64 billion.
Cap rates for single-tenant properties remained flat from the previous quarter at 6.88%, pausing a prolonged, gradual upward trend. A year ago, the overall average was 6.75%. For 2025, so far, the cap rate of 6.8% was higher than 6.4% in 2024 and 5.82% in 2021. Retail properties posted the largest annual increase, with cap rates at 6.93%, compared with 7.13% in Q4 2024. Industrial cap rates stood at 6.48% at the end of the third quarter, compared with 6.39% a year ago and 6.52% last quarter. Office cap rates were 7.18% during Q3, compared with 7.13% a year ago and 7.2% in the last three-month period, Northmarq noted.
Private buyers accounted for 55% of single-tenant acquisition volume through Q3, up from 43% last year. By sector, private buyers accounted for 68% of retail transactions, 58% of office transactions and 48% of industrial sales. Institutional investors represented 19% of overall single-tenant acquisitions, increasing from 17% last year, and accounted for 23% of both industrial and office sales, but only 8% of retail transactions. REIT and listed company activity declined sharply, from 18% of total transaction volume in 2024 to 8% in 2025, with REITs accounting for 11% of retail deals, 8% of industrial deals and just 2% of office deals, highlighting notable differences in investor participation across property types.
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