Market Intelligence
Monitor underwriting criteria, LTV caps, and DSCR requirements
Data as of Q2 2026. Median asking cap rate for single-tenant net lease listings, The Boulder Group, Q2 2026. Asking, not closed.
DSCR requirements have eased since 2024, reflecting a more normal lender appetite. Investment-grade tenants (A-rated or better) clear a lower coverage minimum. Secondary-tier tenants are asked for more coverage. Deteriorated or repositioning assets face the strictest test. A triple-net lease, where the tenant pays operating expenses, supports a lower DSCR than a gross lease on a comparable property.
Leverage on investment-grade NNN portfolios is higher than it was in 2024. Primary-market trophy properties still clear the most leverage. Secondary-market properties are capped lower. Debt funds will lend further up the stack and charge more for it. Traditional banks stay more conservative. How much debt is available still depends on location and tenant credit.
Debt-service reserves are shorter than they were at the 2023 peak, which reads as more lender confidence. Tenant-improvement reserves are still required when a major lease is near expiration. Renewal risk triggers additional reserves. A typical covenant package still tracks annual debt-service coverage, a quarterly DSCR test, and loan-to-value. Interest-only periods have largely disappeared. Standard amortization from year one is the norm across the lender universe.
AAA-rated tenants, including names in large net-lease portfolios, get the easiest coverage test, the most leverage, and the shortest reserves. A-rated tenants sit one step tighter. BBB-rated tenants are asked for more coverage, less leverage, and longer reserves. Non-investment-grade tenants face the strictest package. That tiering is how lenders price tenant quality.
NNN underwriting standards have cycled dramatically over the past decade. Before 2008, coverage minimums were easier and leverage ran high. The financial crisis tightened coverage and cut leverage by 2009-2010. The pre-pandemic market in 2019 eased both. The pandemic re-tightened coverage and cut leverage again. The 2024 rate cuts briefly loosened standards before the 2025 inflation resurgence tightened them again. Today's market is cautious but functioning, with debt more available even as lenders add covenant protection for inflation risk.
Data and analysis on this page are for informational purposes only and do not constitute investment, financial, or tax advice. Figures may be estimated from publicly available sources and should be verified with primary data providers (CoStar, MSCI RCA, CBRE, FRED) before use in investment decisions. Past performance does not guarantee future results.