Net Lease Investment Volume Rises Sharply in Q4 2025, Capping a Strong Year

U.S. net lease investment accelerated in Q4 2025 as the market continued to demonstrate stability and broad investor appeal, supported by steady cap rates and a widening yield spread that improved risk adjusted returns, according to the latest research from CBRE.

Net lease properties feature lease structures in which tenants cover a portion or all of the taxes, insurance and maintenance expenses in addition to rent. Total net lease investment volume rose 38% quarter over quarter and 13% year over year in Q4 2025, reaching $16.0 billion. This strong fourth quarter performance contributed to a 16% increase in full year 2025 activity, bringing the annual total to $51.4 billion.

The industrial & logistics sector continued to account for the largest share of net lease investment activity in Q4 2025 at 55%. Office assets gained notable ground, accounting for 24%, up from 18% a year earlier, while retail held steady at 21%. Q4 net-lease investment performance reflected these shifts: office investment increased 49% year over year to $3.8 billion, retail rose 15% to $3.3 billion, and industrial edged up 1% to $8.8 billion.

“The net lease market showed strong resilience in 2025, with investors returning to high quality assets amid improving capital market conditions and continued demand for stable cash flows,” said Will Pike, President of U.S. Industrial & Logistics Capital Markets and Managing Director of Net Lease Properties at CBRE. “Office saw a notable rebound, industrial remained a core preference, and we anticipate continued broad based strength heading into 2026.”

Private buyers remained the most active participants in the market, with investment rising 33% quarter over quarter and 30% year over year to $9.1 billion in Q4 2025. Investment by institutional investors and equity funds increased 38% quarter over quarter and 70% year over year to $2.9 billion. REIT investment totaled $1.1 billion, up 36% quarter over quarter.

Cross border investment improved sequentially but remained below year ago levels. International investors deployed $1.1 billion into U.S. net lease assets in Q4 2025, up 20% quarter over quarter but down 50% year over year. For the full year, cross border capital totaled $4.0 billion, representing 8% of overall net lease investment.

The average net lease capitalization rate remained stable year over year at 6.9% in Q4 2025, as sector performance diverged: the office average cap rate increased by 17 basis points to 7.4%, the industrial average fell by 10 basis points to 6.4%, and the retail average held steady at 6.9%. The average 10 year Treasury yield stood at 4.1% in Q4 2025, widening the cap rate spread to 276 basis points and reinforcing the sector’s relative pricing advantage.