Real estate cap rates in the USA - October 2012 / by urbanexus

Steve Felix is a weekly blogger on institutional real estate and other topics.  He has a knack for finding and distilling important information.  On November 30, 2012, he posted information on real estate capitalization rates that he gleaned from a recent report prepared by the folks at Real Capital Analytics.  Here is what he had to say:

  • Hotels:  Nationwide, cap rates for hotels have remained relatively flat in 2012 at an average of 7.7%.
  • Apartments:  The capital shift to higher yielding markets has caused national cap rates to rise in the mid/high-rise sector, although average yields for garden properties have held firm and changed little over the past six months.
  • Retail:  While average cap rates on strip centers have fallen to 7.6% nationally, properties with the right anchor and location can command well below that.
  • Industrial:  Nationally cap rates continue to witness compression and, at an average of 7.6%, have reached lows not seen since late 2008.
  • Office:  Average cap rates nationally, on CBD (Central Business District) acquisitions, have risen since Q1'12 with fewer trophy sales to pull down the average and more secondary market sales that push the average up.