MarketSnapshot: Single-Tenant Overall Market

The single-tenant net lease market posted a slight uptick in transaction volume during third quarter 2024, with $10.3 billion in sales volume reported. While this represents a 3.6% rise from last quarter, year-over-year activity remains down. However, just this small increase now puts the net lease sector on track to outpace 2023’s annual total, as nearly $32.5 billion has been logged in 2024 year-to-date.

The industrial sector remained the dominant contributor to investment sales activity, representing 61.5% of this quarter’s volume. While net lease industrial witnessed a healthy increase in transaction volume, the retail sector reported a much more modest quarter-to-quarter increase, as the office sector reported a second straight quarter of declining sales volume.

Cap rates continued to rise across all net lease sectors, with the overall single-tenant average reaching 6.71% in third quarter. Up 12 basis points in the last three months, average cap rates have now increased steadily for eight consecutive quarters.

Several disrupters are set to influence investor sentiment in the final months of the year. With the U.S. Presidential election right around the corner and continued uncertainty regarding the timing and severity of interest rate cuts, it remains to be seen whether potential buyers will make a push to close deals before year-end, or if appetites will cool in hopes of a more favorable environment in 2025.