Cap rates hold steady — but that doesn’t mean time to relax.

🏙️ Cap rates hold steady — but that doesn’t mean time to relax

The net lease sector is signaling a new equilibrium. After nearly two years of adjustment to higher rates and slower deal velocity, Q3 data shows that balance has returned — at least for now.

According to research from The Boulder Group, national cap rates ticked up just one basis point to 6.80%, with retail unchanged at 6.57%, industrial tightening slightly to 7.20%, and office rising modestly to 7.90%.

This rare stability suggests that buyers and sellers are finally finding common ground, and that capital is once again being deployed with clearer expectations on both sides of the table.

💡 The meaning behind the numbers

Stability at the headline level doesn’t mean uniformity beneath the surface.

Industrial listings rose 6%, indicating owners are eager to capture demand momentum, while office and retail inventories declined modestly — reflecting continued caution. Narrower bid–ask spreads also show that deal pricing is aligning with current cost of capital realities rather than wishful thinking.

But with the Fed’s rate cuts offering only modest relief, investors remain in a holding pattern — watchful but not withdrawn. As cap rates plateau, the next move may hinge on fundamentals rather than macro trends.

⚙️ What this means for owners and asset managers

This period of balance provides an opportunity — and a warning.

When the market looks stable, portfolio risk can quietly accumulate. For property owners, this is the time to:

✅ Revisit rent roll assumptions and test whether escalations are keeping pace with inflation.

✅ Stress-test exit strategies for potential shifts in cap rates or refinancing costs.

✅ Reforecast NOI under multiple demand scenarios to understand where margins may thin if interest costs rise again.

Equilibrium, after all, is fragile. The next market cycle will favor teams who have already modeled “what if.”

📊 Why reforecasting matters now

At Kardin, we often say that reforecasting isn’t about predicting the future — it’s about being ready for it.

When the market steadies, it’s tempting to assume yesterday’s numbers will hold. But equilibrium is the best time to build discipline into your financial models — not after the next disruption.

Reforecasting gives CRE teams a real-time pulse check on how property-level assumptions align with macro realities. Whether you’re managing a single net lease or a national portfolio, a rolling reforecast helps you identify trends early and act decisively.

Because the goal isn’t just to survive the next market move — it’s to be positioned for it.

Learn how Kardin helps property owners, managers, and asset managers forecast with confidence:

👉 https://www.kardin.com