Key Highlights
Single-tenant retail net-lease cap rates rose 5 bps to 6.60% in Q2 (Boulder Group).
Investment-grade net-lease cap rates are holding near 6.80%.
The Fed removed the expected 2026 rate cut from its projections, resetting the discount rate.
Transaction volume has held steady despite the higher-for-longer reset.
Buyers are repricing rather than retreating.
The Signal
The "rate cut is coming" trade is off; underwriting has to stand on today's cost of capital.
Cap rates are drifting up, but liquidity has not broken.
Credit tenancy and lease term are back to doing the pricing work.
Net lease is the cleanest read on how CRE is absorbing a higher-for-longer Fed, because its pricing is almost pure math: contractual rent divided by a cap rate that tracks the risk-free curve. When the Fed pulled its 2026 cut, that math moved — and cap rates ticked up.
The important part is what didn't happen. Volume held. A 5 bps drift with steady transaction flow is an orderly repricing, not a freeze — buyers marked to the new curve and kept transacting rather than waiting for relief that is no longer scheduled.
The structural read is a return to fundamentals. With no rate cut to underwrite toward, pricing sorts on tenant credit and lease duration again. Investment-grade paper holds near 6.80% while weaker credit has to clear wider — the spread is doing its job.
Implications
Sellers underwriting a 2026 cut into their pricing need to reset expectations; the bid is real but it's at today's curve, not next year's hoped-for one. Buyers get a cleaner market where credit and term — not macro timing — determine value. For anyone financing acquisitions, the message is to stop pricing in relief that the Fed just removed from the calendar.
Key Takeaway
The rate-cut trade is dead; net-lease pricing now stands on credit, term, and today's curve.
Source: Boulder Group Q2 2026 / Connect CRE / MBA Newslink · July 2026
