Cap rates in the net lease sector are at all-time lows. That statement (of the obvious) in and of itself is not a headline. The change in the mix of properties making up what is being sold today versus the last few years is, however, worth looking at. The properties that have been driving the ever lower cap rates are ironically the ones with less credit behind them. Indeed for each year over the past three years, the proportion of tenants rated A- or better has steadily decreased.

A major reason for this has been limited expansion/new construction by the higher rated tenants, such as banks and auto parts stores; while at the same time significant store growth by the lower rated tenants, such as the dollar stores.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.