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U.S. Single-Tenant Net-Lease Retail Investment Market in 2026: Why Transaction Activity Continues to Rise

The U.S. single-tenant net-lease (STNL) retail market remained one of the most active commercial real estate sectors through mid-2026. Transaction volume increased nearly 10 percent year over year to reach a record high, and private investors accounted for nearly three-quarters of buyer dollar volume. While cap rates have risen since 2022, investors continue to favor assets offering predictable income, particularly properties with long lease terms, built-in rent escalators, and high-credit tenants. The result is a market characterized by strong liquidity, selective pricing, and sustained demand for stable cash-flow-producing retail assets.

What Is Driving the Recovery in Single-Tenant Net-Lease Retail Investment Sales?

Transaction activity continued its upward trajectory through the second quarter of 2026, extending the recovery that began after the market slowdown in 2023.

Sales activity improved by more than 23 percent in 2025 and continued growing on a trailing 12-month basis through mid-2026. Dollar volume increased 9.9 percent year over year, while transaction counts rose 9.6 percent. By trade count, the trailing 12-month period through June 2026 established a new record. 

The data suggests that investors have increasingly adjusted to the current pricing and interest rate environment. Although transaction dollar volume remained slightly below the record set in 2022, overall market liquidity has improved significantly relative to pre-pandemic norms. Transaction counts were 64 percent above the average annual volume recorded between 2014 and 2019.

Which Buyer Groups Are Leading STNL Retail Demand?

Private investors remain the dominant force in the market.

During the year ended June 2026, private investors represented 73 percent of buyer dollar volume, far exceeding institutions, REITs, foreign buyers, and cross-border investors combined. Private investor dollar volume increased 37 percent over a little more than two years and remained only 1.5 percent below the 2022 peak. 

Institutions remained active participants, but private capital has been the primary source of transaction momentum. The breadth of investor participation suggests confidence in the sector's ability to generate consistent income despite elevated financing costs.

How Are Different Transaction Types Performing?

The recovery has not been uniform across transaction structures.

Individual asset sales have remained the strongest market segment. On a trailing 12-month basis through the second quarter of 2026, individual investment sales increased 13 percent year over year by dollar volume. 

Portfolio transactions moved in the opposite direction. Portfolio activity declined 13 percent in the quarter and 16 percent on a trailing 12-month basis compared with the previous period. 
Meanwhile, entity-level activity increased substantially, driven largely by larger corporate transactions, including acquisition activity involving ECHO Realty. Despite strong growth, entity-level sales still represented only 2.6 percent of total dollar volume. 

How Is Tenant Credit Quality Affecting Cap Rates?

Investors are increasingly differentiating between tenant credit profiles.

Since 2024, average cap rates for properties leased to mid-tier and lower-tier tenants have increased roughly 40 basis points. Over the same period, cap rates for top-tier tenants increased approximately 20 basis points. 

As a result, the cap-rate spread between premium-credit tenants and lower-credit tenants widened during 2026.

The trend indicates that investors continue to place a premium on income security. Although cap-rate spreads are wider than in 2024, they remain within historical norms and comparable to levels observed during 2020.

Why Does Lease Term Remain a Major Pricing Factor?

Remaining lease duration continues to have a measurable impact on investor pricing decisions.

Properties with more than 15 years remaining on the lease achieved an average cap rate of 5.9 percent. Assets with five to 15 years remaining traded around 6.7 percent, while properties with less than five years remaining averaged 7.4 percent. 

This 150-basis-point spread demonstrates how investors assign value to future income certainty. Longer lease structures typically provide greater visibility into cash flow, reducing perceived risk and supporting stronger pricing.  

How Do Current Cap Rates Compare With Treasury Yields?

Despite higher interest rates, valuation spreads remain relatively consistent with recent market history.

The average spread between STNL retail cap rates and the 10-year Treasury yield measured approximately 210 basis points in June 2026. That figure aligns closely with the range observed during the past four years. 

The report notes that today's market differs substantially from the pre-Global Financial Crisis period due to more conservative underwriting standards. Investors who had delayed acquisitions while waiting for lower interest rates appear to be re-entering the market as expectations shift toward rates remaining near current levels in the near term. 

Which Retail Property Types Are Seeing the Strongest Investor Interest?

Transaction activity increased across a diverse mix of retail property categories, signaling broad market demand.

The strongest year-over-year gains were observed among hardware stores, fitness centers, auto dealerships, auto parts and repair facilities, child care centers, and convenience stores. Restaurants also experienced increased activity, supported by consumer demand for convenience and social interaction. 

The report highlights health-related uses and businesses with resistance to e-commerce disruption as recurring themes among actively traded assets. Tax-deferred exchanges also remained an important acquisition mechanism for many investors. 

Comparison: Key STNL Retail Investment Metrics

What Do These Trends Mean for Investors?

For Investors

• The market remains highly liquid, with transaction volumes near historic highs. 
• Premium pricing continues to favor long lease terms and stronger tenant credit. 
• Cap-rate spreads suggest investors still view stable retail income streams as attractive relative to alternative investments. 
• Broad participation across retail categories expands acquisition opportunities beyond traditional net-lease formats.