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National  + Net Lease  | 
Single-tenant big box stores still trade at a discount relative to other net-leased retail

Single-Tenant Big Box Cap Rates Compress by 50 BPs 

National asking cap rates in the single-tenant big box net lease sector decreased to 6.25% in the fourth quarter of 2021, according to The Boulder Group’s 2021 Net Lease Big Box Report. This represented a 50-basis-point decrease from the year-ago period. 

“The decrease in cap rates can be primarily attributed to increased activity in the big box sector from substantial amounts of capital targeting this sector, particularly institutional investors,” said Randy Blankstein, president, The Boulder Group. “Once the economy began to recover from the initial pandemic, activity within the sector increased.” 

Throughout 2021, big box investors became more comfortable with non-essential retailers. Accordingly, the spread between investment grade and non-investment grade bog box retailers shrunk to 90 bps from 105 bps. 

“Following the surge in demand for essential and investment grade retailers in 2020, the supply of these assets was limited in 2021,” said Jimmy Goodman, partner, The Boulder Group. 

However, SVP John Feeney added, “Despite the positive investor sentiment for the big box sector, these properties are still priced at a discount to the overall net lease retail market.” That discount was 37 bps in Q4. 


Inside The Story

Boulder Group

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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