What is a good cap rate for a net-lease property?

There isn't a single good number — it depends entirely on the tenant, the lease term, and the rate environment. A lease backed by investment-grade corporate credit trades at a much lower cap rate than a franchisee or local operator, and a lower cap rate means a higher price for the same rent.

Does a lower cap rate mean my property is worth more?

Yes. Value is your annual net income divided by the cap rate, so a lower cap rate produces a higher price. Buyers accept a lower return when the income looks safer — strong tenant, long term, clean lease.

How often do cap rates change?

Constantly. They move with interest rates and with how buyers feel about a given tenant, so a cap rate from a year ago — or even a quarter ago — can be well off today's. That's why the fastest read is asking a buyer who is pricing these deals right now.

What Cap Rate Will My Net-Lease Property Sell At?

The cap rate is the single number that decides what your net-lease property sells for. Keep the rent exactly the same, move the cap rate a point, and the price can swing by hundreds of thousands of dollars. So the real question behind "what's my property worth" is usually "what cap rate will it trade at?"

Here's how to figure out yours. (For the full valuation picture, start with What Is My Net-Lease Property Worth? — this page zooms in on the cap rate itself.)

A quick refresher

Value = Annual Net Income ÷ Cap Rate. The cap rate is the annual return a buyer expects on what they pay. The key quirk: a lower cap rate means a higher price, because buyers accept a smaller return when the income looks safe. So when you want a higher value, you want a lower cap rate.

There is no single "market" cap rate

You'll see people throw out a number — "net lease is a 6.5% cap" — as if there's one rate for everything. There isn't. Most single-tenant net-lease deals land somewhere in the 5% to 8% range, but that band is wide on purpose. Where your property falls inside it is set by your tenant, your lease, and the rate environment — not by an average.

Roughly, from tightest cap rate (highest price) to widest:

Investment-grade corporate credit — a national chain with a corporate-guaranteed lease and long term. The safest income, so the lowest cap rate.
Strong operators and large franchisees — dependable, but a step below a corporate guarantee, so a bit higher.
Smaller franchisees and local tenants — more risk on the income, so a higher cap rate and a lower price for the same rent.
Short-term or uncertain situations — a lease winding down, a tenant in question. The widest cap rates, because the buyer is pricing in what happens next.

What pushes your number up or down

Tenant credit — the biggest lever. The stronger and more corporate the guarantee, the lower the cap rate.
Years left on the lease — more firm term means more certainty and a tighter cap rate. As a lease winds down, the cap rate climbs.
Rent and its bumps — built-in increases make the income grow, which buyers pay up for.
Lease structure — an absolute-NNN lease where the tenant covers everything is worth more than one that leaves you on the hook for the roof and structure.
Location and the real estate — a strong corner holds value even if the tenant ever leaves, which supports a tighter cap rate.

Why interest rates move every cap rate

Cap rates track the cost of money. When rates rise, buyers need a bigger return to make a deal pencil, so cap rates drift up and prices come down — even if your lease hasn't changed at all. When rates fall, the reverse. Whatever the rate headlines are this quarter, that pressure is baked into your cap rate, which is exactly why last year's figure can be well off today's.

How to find the cap rate for your property

Look at recent comps. Sales of similar leases — same kind of tenant, similar term, similar market. The catch: those trade in a world of broker closings and deal databases a consumer website doesn't reach.
Model the sensitivity. Plug your rent and a few cap rates into our value estimator and watch the price move. It won't tell you the exact rate your property trades at, but it shows how much that number matters.
Ask a buyer who prices these every day. The truest cap rate is the one someone will actually transact at — today, for your specific tenant and term.

We price these every day

We buy single-tenant net-lease property directly, so we know where real cap rates are right now — not last year, and not in theory. Send us the basics — tenant, location, current rent, and years left — and we'll tell you the cap rate and the number your property is worth to us, usually within a few days. No cost, no obligation. Get a number on your property.