The Collision Net Lease Market: What Has Changed Since the Start of 2025?
Over the past 20 months, the collision net lease market has evolved alongside elevated interest rates, persistent inflation, industry consolidation and broader economic uncertainty.
Matthews™ has tracked more than $425 million in collision center transactions since the beginning of 2025, creating a meaningful dataset for evaluating how investors are pricing Caliber Collision, Crash Champions, Classic Collision, Gerber Collision & Glass and other operators across the country.
At first glance, the headline numbers suggest pricing has strengthened. Across our 2025 dataset, 78 collision properties traded at an average cap rate of 7.31%. Through September 2026, that average declined to 6.99%. The 30-basis-point shift in the overall average, however, does not tell the full story. The more significant change has been the widening separation between premium collision real estate and the rest of the market.
The Numbers
| Metric | 2025 | 2026 YTD |
| Average Cap Rate | 7.31% | 6.99% |
| Average Rent/SF | $13.40 | $14.63 |
| Average Remaining Lease Term | 9.3 Years | 8.6 Years |
| Average Building Size | 17,508 SF | 16,085 SF |
| Average Price/SF | $192.58 | $218.98 |
The average collision property in our dataset is trading at a cap rate 30 basis points lower than in 2025, while average pricing increased from roughly $193/SF to $219/SF, a gain of about 13.5%. Average rents also increased about 9%, from $13.40/SF to $14.63/SF.
Those figures are notable because the average remaining lease term for properties sold in 2026 is shorter than it was in 2025.
Buyers Have Become More Selective, and the Best Assets Are Still Pricing Aggressively
One of the clearest changes is that investors are less willing to treat all collision properties the same.
A newly constructed Caliber Collision with a 15-year NNN lease represents a different investment profile than a 30- or 40-year-old collision facility with five years remaining on an NN+ lease. Pricing increasingly reflects that distinction.
Throughout 2026, several newly constructed or substantially renovated Caliber properties with 15-year NNN leases have traded in the mid-5% to low-6% cap rate range. Long-term NNN properties leased to other major collision operators have attracted similarly strong pricing.
Older facilities with shorter lease terms, landlord responsibilities or greater residual real estate risk are more frequently trading in the 7% to 8%+ range, with certain transactions moving materially higher. This spread reflects a more segmented market rather than broad cap rate compression. Investors are paying closer attention to property quality and lease structure.
Underwriting is increasingly focused on the real estate, lease structure, rent basis and remaining term rather than the tenant name alone.
Interest Rates Still Matter, and Treasury Yields Tell the Better Story
For net lease investors, the federal funds rate tells only part of the story. The 5- and 10-year U.S. Treasury yields are often more relevant because commercial real estate lenders commonly price fixed-rate debt at a spread above those benchmarks.
Depending on the borrower, leverage, property quality and lender, acquisition financing for collision real estate is often priced 150 to 250 basis points above the applicable 5- or 10-year Treasury. That relationship remains a meaningful constraint on pricing.
In January 2025, the 5-year Treasury averaged about 4.43%, while the 10-year Treasury traded in the mid-4% range. The 5-year Treasury remained elevated through 2026, averaging about 4.33% in July. As of September 15, 2026, the 10-year Treasury stood at 5.00%.
When the underlying Treasury is in the low- to mid-4% range, a typical bank loan priced 150 to 250 basis points over the index can translate to borrowing costs of roughly 5.5% to 7.0%.
That borrowing environment directly affects net lease collision properties trading at 6% to 7% cap rates.
When debt costs roughly the same as, or more than, a property’s going-in yield, leverage provides less immediate cash flow benefit than it did in the lower-rate environment earlier this decade. Buyers therefore place greater emphasis on contractual rent growth, lease duration, acquisition basis and long-term residual value when evaluating aggressive pricing.
Even in that financing environment, our collision data shows average cap rates declining from 7.31% in 2025 to 7.06% through August 2026. The decline is consistent with continued demand for collision real estate, although the transactions behind the average show that pricing strength has been concentrated among higher-quality assets.
Investors have continued deploying capital into the sector, particularly when a property offers a long-term lease, strong rent increases, favorable real estate fundamentals and durable tenant commitment.
The result is a market where the strongest assets can still command aggressive pricing, while properties with shorter leases, weaker residual fundamentals or less favorable lease structures generally need to offer a larger yield premium.
Inflation Has Changed How Investors Evaluate Rent
Inflation is another important consideration for collision real estate. As of July 2026, CPI was about 3.4% higher YoY, above the Federal Reserve’s long-term 2% target. That environment has placed greater emphasis on contractual rent growth.
A 10- or 15-year lease with flat rent carries a different profile than one with 2% annual increases or meaningful periodic bumps.
Investors are evaluating both current rent and how that rent will compare with the market several years into the lease.
That distinction is especially important for collision facilities, which are specialized assets with substantial buildout requirements. Construction costs, labor costs, insurance and land values all influence the economics of developing and operating these facilities.
Contractual rent growth can help preserve income growth as those costs rise over time.
Rent Basis Is Becoming Just as Important as Credit
Another meaningful shift has been greater scrutiny of rent per square foot.
Our dataset shows average collision rent increasing from $13.40/SF in 2025 to $14.25/SF in 2026. The average, however, masks a wide range of property-level rents.
Individual properties in our dataset range from single-digit rents per square foot to more than $30/SF.
That range can materially affect residual value.
A buyer evaluating a collision property at $9/SF in a market where market rent may be $15/SF could see potential upside.
The same tenant paying $30/SF in a market where comparable industrial or automotive space leases for substantially less presents a different risk profile, regardless of tenant credit.
For that reason, rent-to-market analysis has become an increasingly important component of collision property valuation.
Tenant credit helps assess the likelihood that contractual rent will be paid, while real estate fundamentals help determine the property’s position if the tenant leaves.
Lease Term Continues to Create Significant Value
Remaining lease term is still one of the clearest dividing lines in the market.
Properties with 10 to 15 years of remaining term, particularly NNN leases with contractual increases, continue to attract private investors, family offices and 1031 exchange buyers.
Properties approaching five years of remaining term are viewed differently because buyers begin placing more weight on the real estate beyond the current lease.
At that point, underwriting typically expands to include:
- Renewal probability
- Current rent versus market rent
- Replacement cost
- Alternative-use value
- Tenant investment in the facility
- Location and demographics
- Building age and condition
- Environmental considerations
- Potential capital expenditures
For owners considering a sale within the next several years, lease term can have a meaningful impact on disposition strategy.
As lease term burns off, a net lease property’s income profile can become less valuable to the market unless NOI growth or real estate appreciation helps offset that change.
A property with 10 years remaining today will have five years remaining five years from now. If NOI growth or real estate appreciation does not offset that loss of term, the market may apply a higher cap rate.
For that reason, lease negotiations and disposition strategy are increasingly interconnected.
Economic Uncertainty Has Not Eliminated Demand
Transaction activity has stayed resilient despite a more challenging economic backdrop. Over the past year and a half, investors have navigated changing interest rate expectations, persistent inflation, geopolitical uncertainty and broader economic concerns.
Capital has still pursued collision real estate, supported by the characteristics that originally attracted investors to the sector.
Long-term leases, recognizable national operators, mission-critical locations and a service business that cannot be replaced by e-commerce continue to support demand.
1031 exchange capital also remains an important source of demand, particularly for properties with longer-term NNN leases and strong underlying real estate.
What has changed is the level of scrutiny investors apply to individual assets and lease structures.
The Market Is Becoming More Efficient
Only a few years ago, collision net lease properties represented a relatively small niche within the broader net lease market. Higher transaction volume has created more comparable sales and greater pricing transparency.
That transparency gives buyers more data to evaluate differences in lease structure, rent, credit, geography, building quality and lease duration.
As a result, pricing is becoming more precise across the sector.
A 15-year NNN Caliber Collision in a major growth market may warrant pricing in the 5% to 6% range, while an older NN+ facility with five years remaining may require a 7% or 8%+ return.
Both can be attractive investments, but they represent different risk profiles.
What to Watch Through the Remainder of 2026
The collision net lease market is likely to stay active through the remainder of 2026, with investors continuing to differentiate more sharply between assets.
Interest rates, inflation and broader economic uncertainty will influence pricing, but the largest differences are likely to come from property-level fundamentals.
Lease term, lease structure, rent growth, rent-to-market positioning, location, building quality and residual value will remain central to underwriting.
The shift in average cap rates from 7.31% in 2025 to 7.06% in 2026 suggests modest strengthening at the headline level.
The transactions behind that average show a more nuanced market, with pricing increasingly tied to the durability of both the income stream and the underlying real estate.
Collision real estate is no longer being valued primarily by the tenant occupying the building. Investors are placing greater weight on the quality of the lease, the rent basis and the real estate itself.
For owners, understanding where a property fits within this more segmented market can help inform both lease and disposition decisions.
