Cap Rates: The Story’s In The Details

August 25, 2017

Cap Rates: The Story’s In The Details

August 24, 2017 | Paul Bubny | GlobeSt.com

LOS ANGELES—The cap rate story for the first half of this year is in the details, rather than overarching trends. And that’s expected to be the case as well when transactions in the year’s second half are tallied up, going by the results of CBRE’s latest North America Cap Rate Survey.

The general outlook for cap rates and returns in the year’s second half is for stable pricing, according to the report accompanying this year’s survey. “However, the sentiment of survey respondents varied by property type, segment, class and metro-tier grouping. The consensus is that if rates do change in H2 2017, they are more likely to increase modestly.”

In general, “there was limited movement in cap rates for US commercial real estate” during the first six months of this year, with the exception of class B and C retail in secondary markets, notes Spencer Levy, senior economic advisor and head of Americas research at CBRE. “At the same time, we have seen a decline in sales transaction volume during the first half of ‘17. Instead, many would-be sellers are choosing to refinance rather than sell in an increasingly uncertain market, particularly in multifamily.”

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Second Annual Blue Vault Broker Dealer Educational Summit 2016
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The time (at Blue Vault's 2nd Annual Broker Dealer Educational Summit) proved extremely informative.