Industrial Cap Rates: Warehouse and Distribution Property
Class A industrial cap rates range from 4.75% to 7% across US markets in CBRE's survey, Class B from 5.25% to 7.75%. What drives warehouse cap rates and value at each.
By the CapRateCalculator.co team
Industrial cap rates are among the lowest in commercial real estate. CBRE’s second-half 2025 survey across 56 US markets shows stabilized Class A industrial ranging from 4.75% to 7% and Class B from 5.25% to 7.75%. Single-tenant net lease industrial had a median asking cap rate of 7.28% in the Boulder Group’s third-quarter 2026 report.
Industrial cap rate figures
| Segment | Cap rate | Source |
|---|---|---|
| Class A industrial, stabilized | 4.75% to 7.0% across markets | CBRE, H2 2025 |
| Class B industrial, stabilized | 5.25% to 7.75% across markets | CBRE, H2 2025 |
| Single-tenant net lease industrial | 7.28% median asking | Boulder Group, Q3 2026 |
The CBRE figures are the lowest and highest markets in its tables. Port and big coastal distribution markets sit at the low end.
Value at industrial cap rates
| Cap rate | Value of $1,500,000 NOI |
|---|---|
| 4.75% | $31,579,000 |
| 6.0% | $25,000,000 |
| 7.75% | $19,355,000 |
Why industrial trades at low cap rates
Warehouse demand grew with online shopping and companies holding more inventory closer to customers. The buildings are simple: a large box, loading docks, a parking area. Maintenance and capital costs per square foot are low, and many leases are net, so tenants pay taxes, insurance and upkeep. Lower risk and lower costs mean buyers accept a lower yield.
What moves an industrial cap rate
Location. Buildings near ports, highways and big population centers trade lowest.
Building specs. Clear height, dock doors, truck court depth and power supply decide which tenants can use a building. Modern bulk distribution space beats older, low-ceiling warehouses.
Lease terms. Long leases to strong tenants lower the cap rate. Short leases with rents below market add re-leasing risk but can carry upside at renewal.
Rent growth expectations. Markets where buyers expect rents to keep rising trade at lower cap rates, which is the link the cap rate vs discount rate guide explains.
See cap rates by property type for the full comparison, or the net lease cap rates guide for single-tenant buildings.
Sources: CBRE U.S. Cap Rate Survey H2 2025; The Boulder Group, Net Lease Market Report Q3 2026.
Frequently asked questions
What is the average cap rate for industrial property?
CBRE's second-half 2025 survey across 56 markets puts stabilized Class A industrial between 4.75% and 7% and Class B between 5.25% and 7.75%. Single-tenant net lease industrial had a median asking cap rate of 7.28% in the Boulder Group's third-quarter 2026 report.
Why are warehouse cap rates lower than office cap rates?
Demand for warehouse and distribution space stayed strong with online shopping, buildings are simple and cheap to maintain, and tenants often pay most expenses under net leases. Office faces weaker demand and costly re-leasing. Buyers pay more for each dollar of industrial income.
Are industrial cap rates rising?
CBRE's first-half 2026 survey reported industrial cap rates compressing, the third largest decline of any sector after neighborhood retail and hotels. Rising Treasury yields later in 2026 pushed net lease asking cap rates up, so check recent local sales.