NNN Lease Term & Cap Rates: What the Data Shows (2026)

Every net lease investor knows lease term matters. Few realize how much. We ran the numbers across our entire database of recent NNN transactions, sorted by years of lease term remaining at the time of sale, and the pattern is striking. Lease term isn’t a minor pricing factor — it’s one of the single biggest drivers of what your property is worth.

The Data: Cap Rate by Remaining Lease Term

Sorting our sold comps into three buckets by remaining term tells a clear story:

10+ years remaining: 6.10% average cap rate (706 comps)

Properties with a decade or more of term left trade at the tightest cap rates — meaning the highest prices. Buyers pay a premium for the security of long, predictable income with no near-term re-leasing risk.

5 to 9 years remaining: 7.07% average cap rate (503 comps)

As term drops into the single digits, cap rates jump nearly a full point. The buyer now has to start thinking about what happens when the lease ends — will the tenant renew, and at what rent?

Under 5 years remaining: 7.47% average cap rate (150 comps)

Short-term leases trade widest of all. At this point, the buyer is underwriting re-tenanting risk as much as the current lease. They demand a higher yield to compensate for the uncertainty.

What This Means in Real Dollars

The spread between long-term and short-term pricing is about 137 basis points (6.10% versus 7.47%). That’s not academic — it’s a massive difference in value.

Take a property with $200,000 of annual rent. At a 6.10% cap rate (10+ years remaining), it’s worth about $3.28 million. The exact same property with under five years remaining, at 7.47%, is worth about $2.68 million. That’s a $600,000 difference in value driven entirely by lease term — for the identical building, identical tenant, identical rent.

Put another way: every year of term you let burn off as you approach the short end of the curve is quietly eroding your property’s value.

Why Term Drives Value So Powerfully

Income certainty. A long lease is a long, guaranteed income stream. A short lease is a question mark. Buyers pay for certainty.

Financing. Lenders love long leases and are wary of short ones. A property with 12 years of term is far easier to finance than one with three, which means a bigger buyer pool and more competitive bidding — which drives the cap rate down.

Re-tenanting risk. When a lease nears expiration, the buyer has to underwrite the cost and uncertainty of releasing the space, including potential vacancy, tenant improvements, and re-leasing at an unknown rent. That risk gets priced in as a higher cap rate.

The Lesson for Owners

If you own a NNN property, your lease term is a depreciating asset in its own right. The implications are concrete:

If your lease is long (10+ years), you’re holding peak value. This is when the market pays you the most. If a sale is anywhere in your plans, selling while you’re in the premium bucket captures the most value.

If your lease is heading under 10 years, the clock is working against you. Every year that passes pushes you toward the wider end of the curve. Waiting for a “better market” has to overcome the value you’re losing to time — a high bar.

If your lease is under 5 years, you’re in the discount zone. Your options are to sell now and let the buyer price the re-tenanting risk, or work with your tenant on an early renewal to reset the term and recapture value before selling.

You can see how this plays out across specific tenants like CVS and Dollar General, or check current ranges on our NNN Cap Rate tracker.

How much does lease term affect a NNN property's value?

Significantly. Our comp data shows NNN properties with 10+ years of lease term remaining trade around a 6.10% cap rate, versus 7.47% for those with under five years — a 137-basis-point spread. On a property with $200,000 of rent, that’s roughly a $600,000 difference in value for the same building.

When should I sell my NNN property based on lease term?

Generally, the most value is captured while your lease is still in the 10+ year bucket, where cap rates are tightest. As term drops below 10 and especially below 5 years, cap rates widen and value erodes, so owners with shortening leases often benefit from selling sooner or pursuing an early renewal to reset term.

The Bottom Line

Lease term is one of the most powerful and most overlooked levers on your NNN property’s value. Our data is unambiguous: 6.10% at 10+ years, 7.07% at 5–9 years, 7.47% under 5 years. The premium for long term is real, and the erosion as your lease shortens is just as real. Know which bucket you’re in.