Single-Tenant Net Lease (STNL) Loan Rates 2026
What Lenders Are Actually Pricing Today
Single-tenant net lease loan rates in May 2026 range from 5.25% to 7.00% for investment-grade credit-tenant properties and 6.00% to 8.00% for non-credit or franchise-operator assets, with the spread between tiers reflecting the degree to which debt service is backstopped by corporate covenant rather than real estate cash flow. Life companies dominate best-execution on long-WALT credit-tenant deals, CMBS handles standard STNL at moderate leverage, and regional banks step in for smaller loans or operators below investment grade. The most important pricing variables are tenant credit rating, weighted average lease term remaining, rent escalation structure, and the cap rate relationship to the loan constant.
Current Rate Table
Rates shown are indicative ranges based on current market conditions. Your actual rate will depend on your specific property, leverage, and borrower profile. Contact Commercial Lending Solutions for a precise quote.
| Leverage Tier | Rate Range | Notes |
|---|---|---|
| Investment-Grade Credit Tenant, 10+ Years WALT | 5.25% to 6.00% | Life company best execution; long-term fixed, partial or full IO available |
| Investment-Grade Credit Tenant, 5 to 10 Years WALT | 5.75% to 6.50% | CMBS or life company; shorter lease term adds 25 to 50 bps |
| Non-Credit Franchise Operator, Strong Brand | 6.25% to 7.25% | CMBS or bank execution; 100 to 150 bps wider than investment-grade comp |
| Non-Credit Independent or Local Operator | 6.75% to 8.00% | Bank or debt fund; underwriting leans heavily on real estate residual value |
Rates are illustrative ranges as of May 2026 and subject to change. All loan programs subject to underwriting approval. Not a commitment to lend.
What Drives Single-Tenant Net Lease (STNL) Loan Rates
Understanding these factors helps you position your deal for the best available rate.
Tenant Credit Rating
Tenant credit is the dominant pricing variable for STNL loans. An investment-grade tenant (BBB minus or higher) allows lenders to underwrite the corporate covenant directly, compressing spreads by 100 to 200 basis points versus a non-rated franchise operator. Sub-investment-grade or locally owned tenants shift underwriting weight back to real estate fundamentals and push rates to the wide end of the range.
Weighted Average Lease Term Remaining
Lenders price WALT very precisely on net lease assets. A 15-year absolute NNN lease on an investment-grade tenant commands the tightest execution. Each year of lease term below 10 years adds roughly 10 to 25 basis points, and most lenders will not term-match a loan beyond the lease expiration, which limits options when WALT falls under 5 years.
Rent Escalation Structure
Fixed rent bumps of 10% every 5 years or 1.5% to 2.0% annual increases support higher loan proceeds and tighter pricing by improving the debt yield trajectory over the loan term. Flat leases with no escalations compress proceeds and widen spreads modestly, as the real debt yield deteriorates in an inflationary environment.
10-Year Treasury Benchmark
Permanent STNL loans price as a spread over the 10-year Treasury, typically 125 to 250 basis points depending on lender type and deal quality. Life companies run the tightest spreads (125 to 175 bps) on qualifying credit-tenant deals. CMBS adds 25 to 50 basis points for structuring and distribution costs. When Treasuries move, STNL loan rates move in direct proportion.
Cap Rate to Loan Constant Relationship
Net lease lenders monitor the going-in cap rate relative to the loan constant closely. When cap rates compress below the loan constant, debt service coverage tightens and lenders reduce proceeds rather than waiving DSCR floors. For most credit-tenant product in 2026, lenders require a minimum 1.20x DSCR, which constrains LTV more than stated LTV limits on lower-cap-rate assets.
Lender Type and Execution Channel
Life companies offer the lowest all-in rates on qualifying deals but require 10 or more years of lease term, investment-grade tenancy, and typically a minimum loan size of $3M to $5M. CMBS provides broader credit acceptance and non-recourse structure but adds 25 to 75 basis points in spread and securitization costs. Banks offer flexibility on smaller or non-credit deals but introduce recourse requirements and shorter initial terms.
Property Location and Replacement Cost
While net lease underwriting is tenant-credit-first, lender comfort with residual real estate value still matters, particularly for non-credit operators. A net lease asset on a hard-corner signalized intersection in a top-50 MSA with strong traffic counts prices 25 to 50 basis points tighter than an equivalent lease on a secondary or rural location, reflecting the lender's confidence in re-tenanting or disposition if the lease does not renew.
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How Single-Tenant Net Lease (STNL) Loan Compare to Alternatives
Choosing the right loan structure can mean a 100 to 300 basis point difference in your cost of capital. Here is how current rates compare across loan types.
| Loan Type | Current Rate Range | When to Use vs Single-Tenant Net Lease (STNL) Loan |
|---|---|---|
| CMBS Conduit Loans | 5.75% to 7.25% | CMBS is the default non-recourse execution for standard STNL deals where the tenant is not investment-grade or the loan size is too small for life company interest. STNL-specific CMBS pricing runs close to life company rates on credit-tenant product but accepts a wider range of operators and property types. |
| Life Company Permanent Loans | 5.25% to 6.25% | Life companies provide the lowest rates and longest fixed-rate terms on qualifying credit-tenant STNL deals, often with full or partial interest-only and minimal prepayment flexibility. The tradeoff is strict eligibility: investment-grade tenant, 10 or more years WALT, major or secondary MSA, and minimum loan sizes that exclude smaller assets. |
| SBA 504 Loans | 5.50% to 7.00% | SBA 504 applies when the owner of the business also owns the real estate and occupies at least 51% of the building, which is structurally incompatible with third-party net lease investment. For owner-user single-tenant buildings SBA 504 competes directly, but for investor-owned NNN assets it is not an available option. |
| Bridge Loans | 7.50% to 11.50% | Bridge financing enters the STNL picture when lease term is too short for permanent execution, the tenant is in credit distress, or the property was recently acquired and permanent lenders want seasoning. Bridge rates are 200 to 400 basis points higher than permanent STNL rates and are floating, making them a transitional tool only. |
| Portfolio Bank Loans | 6.00% to 8.00% | Regional and community banks are the primary execution channel for STNL deals under $3M, non-credit operators, or markets where CMBS and life companies decline to lend. Bank loans carry recourse, shorter amortization periods, and typically 5 to 7 year fixed-rate terms with balloon maturities, but close faster and involve fewer third-party costs. |
Single-Tenant Net Lease (STNL) Loan Rates 2026: Frequently Asked Questions
What are current net lease loan rates?
Net lease loan rates in May 2026 range from 5.25% to 7.00% for investment-grade credit-tenant properties and 6.00% to 8.00% for non-credit or franchise-operator assets. Life companies set the floor on qualifying deals at 125 to 175 basis points over the 10-year Treasury, while bank and CMBS execution on non-credit STNL runs 200 to 250 basis points wider than that benchmark.
How much does tenant credit quality affect the rate?
Tenant credit is the single largest pricing variable on STNL loans. Investment-grade tenants price 100 to 200 basis points tighter than non-rated franchise or independent operators because lenders can underwrite the corporate covenant directly rather than relying solely on real estate cash flow. A deal anchored by a BBB-rated national tenant will consistently clear rates that a comparable non-credit deal cannot reach regardless of location.
What lease term is required to get the best rate?
Most lenders require a minimum of 10 years of weighted average lease term remaining to offer best-execution permanent financing on STNL assets. Life companies generally set a hard floor near 10 years. CMBS and bank lenders will go shorter but add 10 to 25 basis points per year below that threshold, and most lenders will not extend loan term past lease expiration, which limits options materially when WALT falls under 5 years.
Are net lease loans recourse or non-recourse?
CMBS and life company loans on STNL properties are typically structured non-recourse with standard carve-outs for fraud, environmental liability, and voluntary bankruptcy. Bank and credit union loans on STNL assets, particularly for deals under $5M or with non-credit tenants, usually require full recourse or a personal guarantee. Borrowers seeking non-recourse execution generally need to use CMBS or a life company program.
What LTV do net lease lenders allow?
Net lease lenders typically advance 60% to 75% of appraised value, but the binding constraint is often DSCR rather than stated LTV. Most lenders require a minimum 1.20x debt service coverage ratio at origination. On lower-cap-rate credit-tenant assets, that DSCR floor can limit actual proceeds to 55% to 65% LTV even when the lender's stated maximum is 70% or 75%.
Which lender type offers the best execution on STNL deals?
Life companies offer the best pricing on investment-grade credit-tenant deals with 10 or more years of lease term remaining, typically 125 to 175 basis points over the 10-year Treasury with partial or full interest-only periods. CMBS is the best non-recourse option for standard STNL deals outside life company parameters. Regional banks provide the most flexibility on smaller loan sizes and non-credit operators but require recourse and offer shorter fixed-rate terms.
Do rent escalations affect net lease loan sizing?
Yes. Fixed rent bumps of 10% every 5 years or annual increases of 1.5% to 2.0% improve the debt yield trajectory over the loan term, which supports tighter pricing and higher proceeds. Flat leases with no escalations result in a real debt yield that deteriorates over time in an inflationary environment, which leads lenders to reduce loan proceeds modestly and, in some cases, add 10 to 25 basis points to the rate.
Trevor Damyan is a commercial mortgage broker with $1B+ in loans closed and direct relationships with life insurance companies, CMBS desks, debt funds, and non-QM lenders. Rate data is compiled from active lender conversations and closed transaction experience.
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