Operating Expense Ratios and Cap Rates by Asset Class: The 2026 Benchmark Reference for Feasibility Studies and Valuation

*Current as of October 27, 2026. Union Metric Appraisal and Feasibility.*

*A cap rate without its expense basis is not a benchmark. It is a number waiting to be misapplied. This reference sets out typical operating expense ratios and capitalization rates for more than twenty asset classes in 2026, states the basis behind every figure, separates institutional evidence from the small-balance and owner-operated evidence that SBA, USDA and community-bank lenders actually underwrite, and explains how an independent feasibility study should use each one.*

The 2026 picture in brief

U.S. cap rates held essentially flat through the first half of 2026 while the 10-year Treasury climbed from a 3.97% low on February 27 to a close of 5.31% on October 5, and stood at 5.00% on October 26. The market did not reprice real estate. It compressed the spread between real estate yields and the risk-free rate, to roughly 60 basis points for apartments and between 120 and 330 basis points for most other sectors.

At October 2026 lending terms, mortgage constants on 25-year amortization run from about 8.5% for SBA 504 and conventional bank debt to about 10.9% at the SBA 7(a) variable cap. Every major property type now carries negative leverage on a cash-on-cash basis. For small and rural collateral, this has a direct consequence: a cap rate borrowed from an institutional survey will usually overstate value, and the rate that clears in the local owner-operator market sits 75 to 200 basis points higher.

Operating expense ratios, meanwhile, vary far more by operating model than by asset class. Absolute net-lease real estate carries landlord expenses near zero. Institutional self-storage runs about 21% to 29% of revenue. Apartments and manufactured housing communities run about 38% to 45%. RV parks run about 54% to 65%. Hotels run about 62% to 80% before a furniture, fixtures and equipment reserve, senior housing about 63% to 88%, and owner-operated special-purpose businesses are measured in denominators that are not revenue at all.

The single most expensive error in this market is mixing evidence sets: applying a net-lease cap rate to an operator's EBITDA, an institutional cap rate to a single rural asset, or a cap rate derived on income after reserves to income before them. This reference is built to prevent all three.

How to read this reference

Every benchmark in this document is reported with four attributes, because a cap rate or an expense ratio is meaningless without them:

1. The basis. For expense ratios: the income denominator (effective gross income, total revenue, gross profit or sales), whether a management fee is included, and whether a replacement reserve is included. For cap rates: whether the rate is applied to net operating income before reserves, after reserves, or to EBITDA, and whether it is a real property rate or a going-concern rate.
2. The source family. Institutional surveys and transaction databases (CBRE, MSCI Real Capital Analytics, IRR, HVS, NIC), public company filings, trade association data (NAA, NACS, NRA), net-lease broker research (The Boulder Group, B+E), and business-broker material. These are not interchangeable, and conflicts between them are shown rather than averaged.
3. The date. Survey field dates matter more than publication dates in a year when the 10-year Treasury moved more than 130 basis points.
4. The population. Whether the figure describes Class A institutional assets in primary markets, small-balance assets under $5 million, or single owner-operated businesses.

Figures labeled *derived* are arithmetic on published numbers, and the arithmetic is stated. Figures labeled *estimate* are Union Metric analytical judgments built from adjacent sourced evidence and are identified as such. Broker marketing and vendor content are flagged as lower quality wherever they appear.

Why the expense ratio and the cap rate must be read together

Value is net operating income divided by the capitalization rate, and net operating income is revenue less operating expenses. The expense ratio and the cap rate are therefore two halves of a single valuation statement, and an error in either one capitalizes into value.

The multiplier is the reciprocal of the cap rate. At a 5.6% apartment cap rate, every $1 of understated annual expense adds $17.86 of value. At 6.59%, the 2026 average for self-storage, it adds $15.17. At 8.0%, the RV park benchmark, it adds $12.50. At 10.0%, a common rate for small-market hotels and glamping, it adds $10.00. A feasibility study that understates expenses by $25,000 on a self-storage acquisition has overstated collateral by about $379,000, and the loan was sized on the larger number.

The basis must also match. A cap rate extracted from sales where buyers capitalized income after a replacement reserve cannot be applied to income before one, and a rate drawn from a survey that imputes a management fee cannot be applied to an owner's statement that omits it. Situs RERC tracks the share of its survey respondents who apply cap rates before versus after reserves. That the question needs tracking at all shows how inconsistent practice is. Where the basis of a comparable rate cannot be identified, it should be adjusted or rejected. Our working adjustment for reserves on most property types is 10 to 30 basis points, a convention rather than a published figure.

For operating-business real estate, a third distinction applies. Hotels, self-storage, senior housing, car washes, marinas, RV parks and similar assets produce income from three components: real property, tangible personal property and intangible business value. A real property cap rate belongs on net operating income after a market management fee, an FF&E reserve and franchise costs, with the return on and of FF&E and the business intangible deducted or separately capitalized. A going-concern rate belongs on EBITDA-like income before those deductions, and the resulting value includes the business. Applying a real property rate to going-concern income overstates the real property value that a lender is actually taking as collateral.

The 2026 rate environment

Treasuries, the Fed and the spread

The defining feature of 2026 is that long-term rates moved and cap rates did not. The 10-year Treasury averaged 4.29% in 2025. It touched a 52-week low of 3.97% on February 27, 2026, reached 4.67% in mid-May, rose through the summer, and closed at 5.31% on October 5, its highest level in nearly two decades, before settling at 5.00% on October 26. On September 16, 2026 the Federal Open Market Committee raised the federal funds target range by a quarter point to 3.75% to 4.00%, its first increase since 2023, and the prime rate moved to 7.00% the following day.

CBRE's H1 2026 Cap Rate Survey, published August 12, 2026 from more than 3,600 estimates across more than 50 markets, found the all-property average cap rate essentially flat. Compression was greatest in neighborhood retail, then hotel and industrial, and larger for Class B and C and value-add assets than for Class A. CBRE Econometric Advisors' follow-up in September reported that 63% of respondents expected no change over the next six months, up from 53%, while the share expecting compression fell from 42% to 20% and the share expecting expansion rose to 17%. Respondents placed the 10-year yield needed to spark a notable rise in transaction volume at a median of 3.75%, far below where it now trades.

The result is spread compression rather than cap rate compression:

An apartment spread of about 60 basis points over Treasuries is below any sustainable equilibrium. Either cap rates widen or buyers are underwriting income growth to close the gap. Multifamily transaction cap rates are already drifting upward, from 5.52% in Q2 2025 to 5.79% in Q2 2026 according to RealPage and MSCI, an eleven-year high. Our underwriting position for valuations dated in Q4 2026 is no compression assumption, with 10 to 25 basis points of expansion risk tested for any sector whose spread to the 10-year is below 150 basis points.

Transaction volume: a partial recovery

MSCI reported trailing-twelve-month volume of $654.0 billion through July 2026, up 34%, but a single data center entity transaction drove much of it. Excluding data centers, July volume was up 1%, which MSCI described as effectively flat. Small-cap volume, measured by Boxwood Means on properties under $5 million, was $161.4 billion over the twelve months to Q2 2026, up 11.7% from a year earlier and 35.7% above the 2024 trough, but still 22.7% below the 2022 peak. Fewer trades mean thinner comparable sets, which raises the importance of method in every valuation that relies on them.

Lending terms and mortgage constants

Sources: SomerCor 504 pricing, October 8, 2026; WSJ prime; CommLoan and Northmarq indicative pricing; SOP 50 10 8.1 rate caps. Constants calculated on monthly payments.

Every one of those constants sits above every sector's transaction cap rate. CRED iQ's analysis of $26.1 billion of 2026 securitized loans, published in June, found negative coupon-to-cap leverage in manufactured housing (−86 basis points), mixed-use (−43), self-storage (−35), industrial (−30) and multifamily (−19), with only retail (+20), office (+95) and hospitality (+124) positive on a coupon basis. Measured against an amortizing constant, which is what determines a borrower's cash-on-cash return, all of them are negative, and those spreads were measured before the 10-year reached 5%. Fifty-six percent of the balance CRED iQ examined was full-term interest-only, the device borrowers use to avoid amortization drag. Owner-operators financed with SBA debt do not have that option.

The band of investment and the debt-coverage floor

Two formulas from *The Appraisal of Real Estate* turn lending terms into a cap rate test. The band of investment weights the mortgage constant and the equity dividend rate by their shares of the capital stack. The debt coverage formula, cap rate equals debt service coverage ratio times loan-to-value times mortgage constant, gives the lowest cap rate at which a loan of a given size can still meet its coverage covenant. Worked at October 2026 terms:

The equity dividend rates are judgment inputs. The conclusions are not. Each financing-derived rate sits 100 to 500 basis points above institutional transaction cap rates, which shows that debt markets are not setting institutional prices; all-equity and low-leverage buyers are. For small owner-occupied assets financed with SBA debt, however, the debt-derived rate is often much closer to what actually clears. A band of investment built on SBA terms produces an owner-user or going-concern rate rather than an investor market rate, and it should be labeled that way. And where a concluded cap rate falls below the debt-coverage floor at the lender's actual terms, the loan as proposed cannot be sized off the value: either the loan-to-value falls or the value conclusion is too high.

The small-balance and tertiary premium

The assets that SBA, USDA and community banks finance are not the assets that institutional surveys describe. The evidence for the size and market-tier premium is uneven by sector but consistent in direction.

Two cautions apply. Boxwood's small-cap industrial and office rates run below institutional averages, which most likely reflects owner-user transactions and reported-rate selection bias rather than lower risk. And the lending market itself has thinned at the small end: Freddie Mac retired its Small Balance Loan program on April 15, 2026, folding it into a conventional small product for loans of $2 million to $10 million, and small-balance apartment loans price about 40 basis points above large loans.

The defensible method for a small asset begins with local extraction from three or more verified sales of comparable size, using a consistent income basis. Where local data is thin, the rate is built up from an institutional anchor with explicit, separately supported increments for size and liquidity, market tier, asset quality and management intensity, and then reconciled against the debt-coverage floor at the lender's terms. Where the likely buyer is a local owner-operator using SBA or community-bank debt, the band of investment on those terms is a primary indicator rather than a cross-check.

The master benchmark table

The table below summarizes the typical operating expense ratio and cap rate for each asset class covered in this reference, with the basis for each and a separate column for the small-balance or owner-operated range that is most relevant to SBA, USDA and community-bank collateral. Detailed evidence, conflicts and sources for every row follow in the asset sections.

Part one: core property sectors

Multifamily

Multifamily is where expense growth is compressing net operating income most visibly. NAA's 2025 rent dollar left 11 cents for owners after 43 cents of debt service, 27 cents of operations, 10 cents of property taxes, 7 cents of payroll and 1 cent of reserves. Property tax is the largest single operating expense. Insurance growth has slowed sharply after rising 126% from the start of the decade, and Yardi Matrix expects premiums to remain flat or fall in 2026, but water, energy and waste now lead cost growth.

The pricing conflict between sources is material: 5.8% from MSCI RCA, 6.2% from Marcus & Millichap, and 5.63% to 6.36% from IRR by class. The MSCI figure reflects institutional Class A trades. For sub-$5 million Class B and C collateral, our anchor is 6.0% to 6.4%, supported by the Arbor small-balance series, Marcus & Millichap and IRR's Class B rates, with expenses underwritten at 40% to 45% of effective gross income and reserves added separately. Freddie Mac's multifamily delinquency rose from 0.44% to 0.51% in the first half of 2026.

What a multifamily feasibility study must prove. That rents are achievable against current supply, that expenses reflect the reassessed tax bill and current insurance and utility costs rather than the seller's history, and that the concluded cap rate is drawn from sales of comparable size and class. A multifamily feasibility study that applies a 5.6% institutional rate to a 40-unit Class B property in a secondary market has overstated value by roughly 10% to 15% before any expense error is considered.

Office and medical office

Office is the only major sector where national expense benchmarks have effectively stopped. The Income/Expense IQ product that carried IREM, BOMA and NAA data was shut down on December 31, 2025, so the 2024 data year is the last published national office expense stack. Office expenses fell 7% that year while gross rents rose about 9%, which makes office the one sector where the ratio improved, on a sample that is now dated.

Pricing is the most polarized of any sector. CBRE Econometric Advisors observed in September 2026 that expectations for office cap rates have never been more polarized, and the gap between low and high estimates widened while every other sector's narrowed. Marcus & Millichap reports that office prices fell 32% between 2021 and 2025, and that owner-users made up about 13% of acquisitions, against a historical norm of 5% to 8%. Medical office is the defensive exception, priced roughly 70 to 150 basis points inside general office.

What an office feasibility study must prove. For SBA owner-occupied office, the cap rate matters less than the re-tenanting assumption: what the building is worth if the owner-user leaves, how long it takes to lease, and at what cost. For investor office of Class B or below, we underwrite from IRR's 8.8% and stress to 10%.

Retail and single-tenant net lease

Retail has the strongest fundamentals of the commercial sectors and the widest pricing gap between sources: 6.0% for shopping centers in the Cushman & Wakefield series against 7.14% for neighborhood centers in IRR's survey. A feasibility study should cite the specific series rather than an average of the two.

In net lease, the dominant variable is not property type but tenant credit and remaining lease term. Dollar General alone ranges from 6.85% on 12 to 15 years of remaining term to 9.10% on three years or less, a spread of 225 basis points. Boulder's overall net-lease cap rate rose 10 basis points to 6.92% in Q3 2026, the largest quarterly increase since 2023 and the highest level in more than a decade, and Boulder notes that permanent financing is now generally priced above net-lease cap rates. Boulder's figures are median asking rates; the gap between asking and closed rates was about 25 basis points for retail in Q3 2026.

What a retail feasibility study must prove. For multi-tenant centers, non-recoverable expenses modeled from the leases rather than from a ratio, and vacancy-period costs carried by the landlord. For single-tenant assets, rent coverage at the store level, because a net-lease cap rate prices the tenant's promise to pay, and that promise is only as good as the store's ability to cover its occupancy cost.

Industrial

Industrial shows the clearest small-balance signal in any sector: about 90 basis points between buildings of 750,000 square feet and above and buildings of 10,000 to 50,000 square feet. Development is expected to run 64% below the 2023 peak in 2026, which supports fundamentals. Industrial outdoor storage vacancy was 3.6% in Q2 2026 against 6.5% for industrial overall. Cold storage is the reverse case, with vacancy reaching 7.7% at mid-2026 and industrial electricity prices up 6.0% in 2025 and 6.8% in the first five months of 2026.

What an industrial feasibility study must prove. For small-bay and flex, absorption and rent evidence from buildings of the subject's size rather than from big-box logistics. For cold storage, a utility-cost sensitivity, because power is the line most likely to break the pro forma. For industrial outdoor storage, the legal status of the use under zoning, which is a larger risk than any physical condition.

Manufactured housing communities

Manufactured housing moved against every other sector in 2025, compressing from 6.8% to 6.0% on Northmarq's all-trade series while rents rose 4.9% to 6.6% at the REITs. The gap between institutional and private pricing is the widest of any sector we track: institutional deals clear in the low to mid 4% range while the all-trade average is 6.0%, and smaller communities with private utilities and park-owned homes clear above that.

What a manufactured housing feasibility study must prove. That utility recovery, infrastructure condition and park-owned home exposure have been underwritten explicitly. REIT expense ratios of 38% to 42% are a floor for small communities, which lack scale in management and insurance purchasing, and REIT yields should not be imported into the valuation of a sub-$5 million park.

Part two: operating-business real estate

In this group the income stream is produced by an operating business, the cap rate is usually a going-concern rate, and the expense ratio depends on who runs the property and how. The spread between institutional and owner-operated evidence is structural, not cyclical.

Hotels

Hotel cap rates are applied to net operating income after an FF&E reserve, conventionally 4% of total revenue, on a going-concern basis. CBRE's 2025 sample shows revenue up 2.6% against expenses up 3.1%, with only resort and all-suite hotels growing profit. Utilities rose 5.0%, information technology 4.6% and management fees 3.8%, while insurance fell 5.3% but remains about double its 2019 level. HotStats reported 2025 flow-through in the Americas of only 18% and a labor cost gap of about 9.5 points of revenue between union and non-union hotels.

On pricing, HVS moved during 2026 from expecting cap rate declines to expecting a modest rise in the second half. It recorded a 7.7% average in Q2 2026 and $142,000 per key at an 8.4% cap rate from Q3 to mid-September, and it cautions that exit cap rates of 6% to 7% in low-barrier markets should prompt additional diligence. US Realty Consultants places limited-service at 8.7% with a 9.1% residual rate and an 11.3% discount rate. Replacement cost runs about $170,000 to $197,000 per room for limited-service and midscale extended-stay and $200,000 for select-service, according to HVS's 2026 development cost survey, which is why new construction in these segments rarely pencils at system-average performance.

What a hotel feasibility study must prove. That the subject can achieve a market-specific RevPAR supported by identified demand generators, that the full franchise fee stack, management fee and 4% reserve are in the expense statement, and that the cap rate reflects the subject's chain scale and market tier. For SBA and USDA hotels, which are predominantly economy to upper midscale properties in secondary and tertiary markets and often exposed to property improvement plans, we underwrite 8.75% to 10.0% on net operating income after reserve, not the 8.2% national blend, which is lifted by upscale assets. An independent hotel feasibility study consultant should state the chain-scale source of every rate used.

Senior housing and care

Senior housing is the one sector still compressing in 2026. CBRE's H1 2026 survey found the average cap rate fell 19 basis points, with every respondent reporting no change or a decrease, after memory care turned in the second half of 2025 following 48 consecutive months of increases. Fundamentals explain it: only 19,839 units were under construction in Q1 2026, the sixteenth straight quarterly decline, and CBRE expects annual rent growth above 5% over three years. Momentum is slowing, however. Only 59% of CBRE respondents expect further compression, down from 84%. Levin Associates recorded a record $267,000 per unit for seniors housing in 2025 and $105,600 per bed for skilled nursing.

The skilled nursing figures conflict between sources by more than 100 basis points, which most likely reflects different table cells rather than market movement, and should be confirmed against the CBRE survey before use. Skilled nursing expense ratios in this reference are estimates; cost-report data from CMS should be used for any specific facility.

What a senior housing feasibility study must prove. Penetration-rate demand from the age- and income-qualified cohort, a staffing plan priced at current wage floors and agency cost, and a cap rate that reflects operator depth. CBRE's 58 basis point spread between core and non-core understates the operator and occupancy risk in single-operator Class B and C assisted living and memory care, which we underwrite 100 to 175 basis points above core Class A.

Self-storage

Self-storage pricing per square foot is about 20% below the 2022 peak, and the 6.59% average cap rate's spread to Treasuries narrowed in 2026 because yields rose, not because pricing improved. Rents remain soft: Marcus & Millichap expects asking rents to fall 0.8% to $1.18 per square foot in 2026, the fourth consecutive annual decline. Supply is easing, with 2026 completions of 53 million square feet the lowest since 2016. Expenses keep rising, led by property tax, which rose 5.3% at Public Storage in 2025, while REITs cut on-site payroll through centralization that an independent cannot replicate. Securitized self-storage delinquency was only 0.05% in July 2026, but nearly 30% of securitized balances were on servicer watchlists.

What a self-storage feasibility study must prove. Demand as a flow of household moves and life events rather than a stock of square feet per capita, a lease-up schedule of 24 to 36 months with a matching reserve, property tax reassessed to the purchase or as-complete value, and a cap rate applied to income after an imputed management fee. The REIT direct expense ratio and the REIT Class A cap rate are a matched pair that describes a platform. Neither applies to a single independent facility.

RV parks and campgrounds

Newmark's survey applies cap rates to income after a $75 per pad reserve. Its expense benchmark rests on financial statements from 2015 to 2021, which predate the rise in insurance, wages and electricity, so it understates 2026 costs. Transient revenue at both public REITs fell about 9% in 2025 while annual base rent rose, and the 25-year bank loan constant of 8.7% to 9.3% exceeds the 8.0% going-in cap rate, so new acquisitions carry negative leverage. SBA adds a structural constraint: more than half of gross revenue must come from stays of 30 days or less, so the stable, annual-heavy tenure mix that improves the expense ratio is the one that fails eligibility.

What an RV park feasibility study must prove. Demand by format, utility capacity and septic and well permitting, and an expense statement at 2026 cost levels. For SBA-eligible transient parks, we underwrite 8.75% to 9.5% on income after reserves, with expenses at 58% to 65% of revenue rather than the 53.7% historical benchmark.

RV and boat storage

No standardized cap rate survey exists for dedicated RV and boat storage, and brokers report as much. One broker describes rates widening from the low 6% to mid 7% range in 2022 to about 7.5% to 8.5% and higher by mid-2026; vendor content claiming mid-5% to low-6% rates is marketing. The weight of evidence supports 7% to 9% for stabilized independent product. Advertised parking rates rose 4.4% year over year to $6.38 per square foot. The only primary line-item evidence, a single CMBS loan, derived about 38% of its income from contractor and residential leases, which places storage-only expenses nearer 45% of storage revenue. For small sites with paid staffing and no contract income, we underwrite 33% to 40%.

What an RV and boat storage feasibility study must prove. That demand comes from households barred from storing vehicles at home, through homeowners association and municipal restrictions, rather than from registrations alone. That property tax has been reset from any agricultural or unimproved-land assessment. And that the cap rate is drawn from closed sales of this asset type. We treat any appraisal below 7% on a non-institutional facility as needing support.

Marinas

The Safe Harbor sale to Blackstone, signed in February 2025, works out to about $116,000 per slip or dry space, and Safe Harbor's 2024 single-asset purchases blended to about $69,000 per slip. The roughly 5% implied rate on that portfolio is a scarcity-driven, portfolio-premium rate on rental-only income and should never be applied to a single independent marina. Insurance renewals rose 20% to 25% in 2024, recurring capital spending reached $993 per slip, and same-property expenses grew 6.9% against revenue growth of 5.9%.

What a marina feasibility study must prove. Slip demand by length band from vessel registrations, dock and dredging capital on a realistic schedule, and an income statement that separates storage income from service, fuel and retail. For independent wet-slip marinas we underwrite 8.0% to 10.0% on full-business income after a dock replacement reserve, adding 50 to 100 basis points for leased submerged land or high service and fuel revenue.

Glamping and outdoor hospitality

There are no closed glamping-only sales with published cap rates, so every rate in this segment is a proxy or a buyer target. Institutional acquirers report targeting three to five times revenue at pro forma cap rates of 10% or more. Industry ADR reached about $251 in 2025, but estimates of market size vary by a factor of five depending on scope.

What a glamping feasibility study must prove. Demand from a defined drive-time market, a seasonal staffing and housekeeping model, platform fees loaded as expense, and an explicit statement that the cap rate is a proxy. For SBA-scale glamping we underwrite 9.5% to 11.0% with expenses at 50% to 60% of revenue.

Part three: special-purpose property

Special-purpose properties carry two entirely different sets of valuation evidence. One is the net-lease market, where an investor buys a lease from a credit or regional tenant and the cap rate prices that tenant's promise. The other is the going-concern market, where a buyer acquires the operating business and its real estate together and pays a multiple of EBITDA. In October 2026, net-lease cap rates for credit-tenant special-purpose real estate cluster between about 4.2% and 8.6%. Single-site going concerns on the same kinds of sites change hands at roughly 3x to 9x EBITDA, which is equivalent to about 11% to 33% on an EBITDA capitalization basis. The two evidence sets sit 300 to 1,500 basis points apart, and mixing them is the main valuation error in this segment.

Gas stations and convenience stores

Fuel retail is a gross-profit business. Expense ratios on revenue rise and fall with pump prices and say nothing about operating performance, so expenses are benchmarked per store-month and fuel margin per gallon. Format matters as much as geography: the gap between Murphy USA's small-box format and Casey's foodservice-heavy stores is more than double on a per-store basis.

Net-lease pricing for investment-grade convenience has tightened even as the broad market widened, helped in 7-Eleven's case by a credit upgrade. On the going-concern side, practitioners value the operation first by income or gross profit multiplier, deduct the depreciated cost of land, building and equipment, and treat the residual as business value. When the cost approach exceeds going-concern value, the residual is zero and the shortfall is obsolescence.

What a gas station feasibility study must prove. A fuel margin normalized to the cycle rather than the trailing year, card fees modeled on card-tendered sales, owner labor imputed at market, tank compliance and reserves loaded, and a value conclusion built from the going-concern evidence, not from a net-lease cap rate on a 7-Eleven. A USDA feasibility study consultant working on a rural fuel site should expect the Agency to deduct any going-concern value before collateral is discounted under 7 CFR 5001.203, so the real property and equipment value must stand on its own.

Truck stops and travel centers

The roughly 300 basis point spread between a national-credit ground lease and a franchisee sale-leaseback reflects environmental, special-purpose and operator risk. Diesel margins have been squeezed, and the largest private operators sell almost no real estate into the net-lease market, so evidence for independent travel centers is thin.

What a truck stop feasibility study must prove. That the site captures nonfuel revenue, because diesel is the price of bringing the truck onto the lot rather than the source of its profit, and that 24-hour labor has been built from a staffing floor rather than a percentage of sales.

Car washes

Net-lease car wash pricing has held in a narrow band through 2026 while going-concern values compressed far more, a pattern visible in the sector's largest exit, the sale of a national car wash division for a fraction of its prior carrying value after a large goodwill impairment. Listed net-lease inventory reached a 2026 high of 299 properties in September, a sign of growing developer and sale-leaseback supply.

What a car wash feasibility study must prove. Membership counts reconciled to processor deposits, churn applied to the forward projection, water and sewer at the site's actual reclaim configuration, and a valuation that separates market rent on the real estate from the operating business. A car wash feasibility study that capitalizes operator EBITDA at a 6.3% net-lease cap rate has valued a business at a real estate rate.

Restaurants

Restaurant net-lease pricing is the most bifurcated of any segment: investment-grade ground leases are at historic tights while casual dining and value concepts keep widening. Operating margins are thin enough that a one- to two-point rise in occupancy cost after a sale-leaseback can eliminate profitability.

What a restaurant feasibility study must prove. That prime cost and occupancy cost are within ranges the concept can sustain, because the lease is set before the first customer arrives and everything else flexes around it.

Childcare centers

Childcare shows operator stress transmitting to real estate. The largest national operator's cost of services rose sharply in 2026, it closed 49 centers in one quarter and amended a master lease covering 545 sites. Net-lease cap rates held near 6.9% through year-end 2025 only because listed inventory fell. Lenders should expect wider pricing as closures roll through.

What a childcare feasibility study must prove. Enrollment demand from the age-qualified population within a realistic drive time, a staffing ratio that meets state licensing, and an alternative-use analysis, because purpose-built layouts limit the buyer pool.

Fitness, bowling and entertainment, golf

The bowling consolidator's own valuation rule, twelve to fourteen times half of EBITDAR, states plainly that the real estate is worth about half of operating cash flow, capitalized at roughly 7.1% to 8.3%. That is the clearest published bridge between operator value and real estate value in any special-purpose class.

What a leisure feasibility study must prove. That the projection is built on a stabilized year rather than the opening year, because entertainment venues open above their sustainable level and settle, and that capital replacement for turf, lanes or equipment is loaded before coverage is tested.

Data centers

Data centers price wider than investment-grade restaurant ground leases despite stronger tenants, reflecting technical obsolescence and power-contract risk. Smaller enterprise and edge facilities do appear in community-bank lending, and for them the evidence is thin.

What a data center feasibility study must prove. Secured power capacity and its timeline, because in this asset class the utility contract decides feasibility before the tenant does.

Net lease versus going concern: the error that costs the most

Consider an express car wash producing $600,000 of EBITDA, with a market rent for its real estate of $300,000 a year. Capitalizing the operator's EBITDA at the 6.3% net-lease average produces about $9.52 million. Valuing the components correctly, with the real estate's market rent capitalized at 6.3% (about $4.76 million) and the business's $300,000 of EBITDA after rent valued at four times (about $1.20 million), produces about $5.96 million. The shortcut overstates value by about 60%, consistent with the 40% to 70% overstatement range observed across special-purpose assets. The example is illustrative, but the mechanism is common in practice.

The SBA's special-purpose rules exist precisely because of this problem. Under SOP 50 10 8, effective June 1, 2025, and carried into SOP 50 10 8.1 effective October 1, 2026 as summarized in secondary sources, a special-purpose property is a limited-market property with a unique physical design, special construction materials or a layout that restricts its utility to the use for which it was built. The named list includes gas stations, car washes, hotels and motels, marinas, golf courses, bowling alleys, nursing homes and cold storage, among others. For SBA 504 loans, special-purpose property requires 15% borrower equity, or 20% for a start-up. Where intangible value exceeds $250,000 or the transaction involves related parties, a going-concern appraisal is required that separates land, building, equipment and intangibles, prepared by a certified general appraiser with at least four going-concern appraisals of equivalent special-use property in the prior 36 months.

USDA applies the stricter rule. Under 7 CFR 5001.203, any business or going-concern value is deducted from the reconciled market value before collateral is discounted. A value conclusion that borrows a net-lease cap rate does not merely overstate collateral on a USDA file. The overstated portion is removed, and the remaining real property and equipment value must carry the loan alone.

Ten errors and the tests that catch them

How an independent feasibility study consultant uses this reference

Benchmarks are reasonableness tests. They are not substitutes for evidence about the subject property, and a feasibility study that reports only benchmark ratios has not done its work. An independent feasibility study consultant uses a reference of this kind in three places.

The first is the expense rebuild. The subject's historical statements are restated for a market-rate, professionally managed operator after the transaction, with a management fee imputed, the owner's labor priced, insurance at a current quote and property tax reassessed. The result is then compared against the benchmark range for the matching operating model. A rebuilt ratio that falls well below the range is not evidence of efficiency. It is evidence that something is missing.

The second is the cap rate reconciliation. The concluded rate is extracted from local sales of comparable size, built up from an institutional anchor with explicit premiums where local evidence is thin, and tested against the debt-coverage floor at the lender's actual terms. Each step states its basis, and any rate whose basis cannot be identified is adjusted or rejected.

The third is the sensitivity section. The study reports the expense increase and the cap rate expansion that take coverage to the lender's floor and to 1.00x. For SBA files, where change-of-ownership loans are now tested on historical earnings at 1.25x, or 1.15x for business expansions, and for USDA files, where Appendix A to Subpart D of 7 CFR Part 5001 requires sensitivity analysis, that break-even result is often the most useful number in the report.

An SBA feasibility study or USDA feasibility study that uses this reference correctly will rarely conclude a lower cap rate or a lower expense ratio than the evidence for its specific asset class supports. That is the point. The lender's question is not what the best property in the sector is worth, but what this property is worth to the buyers who would actually purchase it, financed on the terms that would actually be available.

How to cite this reference

Union Metric Appraisal and Feasibility, *Operating Expense Ratios and Cap Rates by Asset Class: The 2026 Benchmark Reference for Feasibility Studies and Valuation*, current as of October 27, 2026, unionmetricfeasibility.com.

Researchers, lenders, appraisers and journalists may reproduce any table in this reference with attribution and a link to this page. We update the reference as major surveys are released, typically after the CBRE semiannual cap rate surveys and the NAA, NACS and NIC annual data cycles.

Method and data quality

This reference combines four source families: institutional surveys and transaction databases (CBRE, MSCI Real Capital Analytics, IRR, HVS, US Realty Consultants, NIC and Levin), public company filings (REITs and operators), trade association data (NAA, NACS, the National Restaurant Association and IREM), and net-lease broker research (The Boulder Group and B+E). Business-broker and vendor material is used only where nothing better exists and is labeled as lower quality.

Several limitations should be stated plainly. PwC and Situs RERC 2026 figures were not verified for this edition because both are subscription products. The national Income/Expense IQ data ended with the 2024 data year. The Newmark RV park expense analysis rests on 2015 to 2021 statements. No standardized survey exists for RV and boat storage, glamping, or small marinas. Boulder Group and B+E figures are asking rather than closed cap rates. Survey cap rates are opinions, and transaction averages reflect the mix of what traded. Where sources conflict, this reference shows the conflict rather than averaging it.

*This reference is general market commentary and methodology, not an appraisal, a valuation opinion, investment advice or legal advice. Benchmarks are dated ranges for reasonableness testing and do not substitute for property-specific analysis. Illustrative calculations use stated assumptions and do not describe any actual property. SBA provisions are summarized from secondary sources and should be verified against the operative text of SOP 50 10 8.1; USDA provisions should be verified against 7 CFR Part 5001 at the time of application.*

Related research and case studies

These benchmarks are applied, with the expense basis and cap rate evidence stated, in our case studies: the gas station acquisition in Gettysburg, Ohio, the express car wash in North Port, Florida, the hotel acquisition in Alice, Texas, the new hotel development in Gaffney, South Carolina, the RV park acquisition and expansion in Wolfeboro, New Hampshire, the marina acquisition in Fort Myers Beach, Florida, the RV and boat storage new build in Mesa, Arizona, the winery acquisition in Paso Robles, California, the self-storage new build in Concord, North Carolina, the assisted living acquisition in Keller, Texas, the collision repair acquisition in Bensalem, Pennsylvania and the child care acquisition in Manassas, Virginia.

For the methods behind the figures, read the 2026 Feasibility Methodology Atlas, rationalizing operating expenses across asset classes, rationalizing the development budget, the income approach, DCF and NOI capitalization, SBA feasibility valuation and debt capacity, DSCR in feasibility studies and going-concern allocation. On the regulatory side, see Three Reports, One Credit File, the 7 CFR Part 5001 Handbook, appraisal requirements by loan program and how USDA treats going-concern value in collateral. Market context for individual sectors is in our reports on self-storage, RV parks and campgrounds, hospitality, assisted living and the 2026 to 2028 economic outlook.

If you need these benchmarks tested against a specific project, UnionMetric prepares lender-ready feasibility studies for SBA and USDA financing across every asset class covered here.

Sources

• CBRE, U.S. Cap Rate Survey H1 2026, as reported by Yahoo Finance
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