Gas prices are climbing, drivers are complaining, and oil executives are warning of a supply shock. None of that has slowed deal flow in gas stations and convenience stores. According to Bisnow, cap rates in the sector are among the lowest of any retail category, even as elevated and volatile fuel prices dominate headlines.
The disconnect is the trade. Investors are underwriting to in-store revenue, not the price at the street.
At a glance
- Average convenience store cap rates sit at 5.63% in Q2 2026, the tightest of 17 net lease sectors tracked by Bisnow.
- Average closed sale price runs around $4.6M, or roughly $1,400 per square foot.
- 100% bonus depreciation passed in July 2025 is juicing returns in an equipment-heavy sector.
- More than 116,000 convenience stores sell fuel in the U.S.; about 61% are single-store operators.
The mechanics behind the trade
Per MMGC Invest data cited by Bisnow, the sector is trading roughly 50 basis points wide of the 10-year Treasury, and prime-credit leases are clearing at or even inside the Treasury itself. Average convenience store cap rates came in at 5.63% in Q2 2026, versus 5.57% a year earlier. Grocery and supermarket properties sit at 5.66%. Pharmacy, discount, and early learning all clear above 7%. An August Northmarq report puts the average closed sale near $4.6 million, or about $1,400 per square foot.
None of this is normal for a sector with daily price swings on its core commodity. The pricing reflects a simple bet: fuel is volatile, but the food service, beverage, and other nonfuel revenue inside a well-run store is durable. Per an industry report cited by Bisnow, the highest-performing U.S. C-store operators by profit out-earned the weakest operators on in-store food revenue by a factor of more than seven in 2025. That gap is the underwriting story.
Our analysis
The losers are small, single-store operators who cannot absorb fuel margin compression. Per Bisnow, about 61% of the more than 116,000 convenience stores that sell fuel in the U.S. Are single-store operators. Many are now looking to sell because they cannot keep up with inside and outside costs.
The winners are large, multi-store platforms with diversified nonfuel revenue and the ability to staff and operate more efficiently. Larger operators can also negotiate better fuel supply and run leaner labor models. That is why, per Bisnow, all-cash deals are dominating the market, and many buyers are publicly traded platforms with capital allocation mandates.
The other tailwind is the 100% bonus depreciation law passed in July 2025. It enables investors to deduct the full value of equipment improvements and purchases upfront. In an equipment-heavy sector like gas stations, that meaningfully boosts after-tax returns. Per Bisnow quoting Sage Chaffin of Northmarq, bonus depreciation is a meaningful return enhancer for the asset class.
For commercial real estate investors, the trade is clear: this is one of the tightest cap rate environments in retail real estate, and it is being driven by net lease buyers chasing top credit. The risk is that if fuel prices spike high enough for long enough, even diversified operators will see traffic compression. But for now, the bid is there.
A worked example
Say you are a net lease buyer looking at a corporate-guarantee c-store at a 6% cap. Two years ago, that same asset would have traded at a 7% cap. The trade works because the tenant is investment grade, the lease is 15 years, and the rent bumps are tied to a fuel hedge. The question is whether the cap rate compression is the right price for the credit. If you can lock in 6% on a 15-year corporate lease with a fuel hedge, that is a competitive yield in today's market. If the lease is unhedged and the tenant is not investment grade, the cap is doing too much work.
What to watch next
Watch the bonus depreciation phase-out. If Congress allows it to roll off, returns compress and the trade slows. Watch the mom-and-pop supply pipeline. Per Bisnow, more single-store operators are looking to sell because they cannot keep up with costs, which means more inventory for less new platforms.
Key takeaways
- C-store cap rates are the tightest in net lease retail at 5.63% in Q2 2026.
- 100% bonus depreciation is a near-term tailwind for the sector.
- The bid is coming from large, multi-store platforms with diversified nonfuel revenue.
- Single-store operators are increasingly selling because they cannot keep up with costs.
Frequently asked questions
Why are investors buying gas stations despite volatile fuel prices?
Per Bisnow, investors are underwriting to in-store revenue like food service, not the volatile fuel margin, and that has kept cap rates tight.
How tight are convenience store cap rates?
Per Bisnow, average convenience store cap rates sit at 5.63% in Q2 2026, the tightest of 17 net lease sectors tracked.
What is the average sale price for a convenience store?
Per an August Northmarq report cited by Bisnow, the average closed sale price is about $4.6 million, or roughly $1,400 per square foot.
What tax policy is supporting the trade?
The 100% bonus depreciation law passed in July 2025 enables investors to deduct the full value of equipment improvements and purchases upfront, juicing returns in an equipment-heavy sector.
Who is selling gas stations right now?
Per Bisnow, smaller single-store operators are increasingly looking to sell because they cannot keep up with inside and outside costs, with about 61% of the more than 116,000 U.S. C-stores that sell fuel being single-store operators.
