Net Lease Cap Rates Mid-Year 2026: Market Report & Trends

Halfway through the year, the net lease market is telling a clearer story than it has in a long time. Net lease cap rates have essentially stopped moving — and underneath that calm surface, the market has split into two very different markets. Here’s where things stand and what it means whether you own a single property or a portfolio.

The Headline Numbers

According to The Boulder Group’s most recent quarterly research, the average single-tenant net lease cap rate sits at 6.80%, down a single basis point from the prior quarter. Retail — the heart of the NNN world — held at 6.55% for the second consecutive quarter. Industrial tightened slightly to 7.15%, and office firmed to 7.90%.

After two years of steady upward drift, that’s a market that has found its level. Sellers and buyers have largely stopped arguing about where pricing belongs — and that agreement is exactly what gets deals done.

The Quiet Headline: Cap Rates Decoupled From Treasuries

Here’s the detail most investors missed. During the first quarter, the 10-year Treasury yield surged roughly 30 basis points — and net lease cap rates didn’t budge. In fact, they compressed slightly. For years, the standard assumption was that cap rates follow the 10-year with a lag. This quarter broke that pattern.

Why? Because the spread between net lease yields and the risk-free rate is still wide enough to absorb rate noise, and because the buyers driving today’s market — 1031 exchange investors on deadlines, institutions with acquisition mandates, and private capital hunting for safety — aren’t waiting for the Fed. When demand is anchored by need rather than speculation, day-to-day rate moves matter less than the headlines suggest.

A Market in Two

The more important divide isn’t between sectors. It’s between quality and everything else. Industry researchers describe the same pattern we see in our own comp database: investment-grade tenants with long remaining lease terms are drawing deep, competitive buyer pools — institutions, exchange buyers, and private investors all chasing the same assets. Meanwhile, shorter leases, weaker credits, and non-rated operators are trading selectively, at meaningfully wider spreads.

In practice, that means two properties with the same tenant logo can live in completely different markets. A Dollar General with 13 years of term is a flight-to-quality asset. The same box with 3 years left is a re-tenanting project, and the market prices it that way. You can see how wide those gaps run on our NNN Cap Rate tracker, or in our tenant profiles for CVS and Dollar General.

What This Means for Owners and Buyers

If you own quality, the window is open. Stable cap rates plus deep demand for credit-backed, long-term leases means sellers of strong assets are transacting at favorable pricing right now — without betting on rate cuts that may not come.

If you own a shorter lease, be realistic. The bifurcated market punishes aspirational pricing on the wrong side of the quality line. Meeting the market upfront beats chasing it down for six months.

If you’re buying, underwrite the asset, not the rate forecast. This quarter proved that tenant credit, lease term, and real estate fundamentals are driving pricing — not the Fed.

The Bottom Line

The net lease market at mid-year is steady, liquid, and deeply divided by quality. Cap rates have stopped climbing, demand for the best assets is firmly intact, and the spread between strong and weak product keeps widening. Knowing which side of that line your property sits on is the single most valuable piece of information an owner can have.