Cap Rate Trends in 2010
By Adam Lyons in : Adam@Champion, Blog, News // May 5 2010
Average US retail capitalization rates decreased by 24 basis points in the 1st quarter of 2010 to 8.34%. This is the first major decline measured since the sustained declines ended in Q1 2007. The data is based on the CBRE Valuation & Advisory Services (VAS) database.
In a broad based value reversal led by the Midwest, cap rates lurched downward by 66 b.p., the largest quarterly move recorded since Q1 2003. Rate increases seemingly had to stop at some point, and it appears some form of stabilization in the market is at hand. Average rates are now comparable to Q2/Q3 2009. While it is too early to tell, Q4 2009 may have been the cap rate peak during the current cycle. Most reported retailer earnings have been positive while consumer spending is on the rise.
The data points used in this update are confirmed closed transactions, adjusted for assumed financing, and are used to reflect overall market trends. Contact a local CBRE appraiser for a detailed overview of a specific market.
US Retail
Cap Rate Trend – Quarterly Average
| 2008 | 2009 | 2010 | ||||||
| Region | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
| East | 6.64 | 6.72 | 7.86 | 8.13 | 7.74 | 8.83 | 8.21 | 8.26 |
| Midwest | 8.12 | 7.85 | 8.16 | 6.68 | 8.05 | 8.62 | 9.78 | 8.52 |
| South | 7.55 | 7.90 | 8.38 | 8.37 | 8.43 | 9.06 | 8.83 | 8.41 |
| West | 6.80 | 6.98 | 7.30 | 7.19 | 8.20 | 8.21 | 8.90 | 8.21 |
| Nation | 7.34 | 7.55 | 7.96 | 7.77 | 8.20 | 8.66 | 9.01 | 8.34 |
| Change | 0.06 | 0.21 | 0.41 | -.19 | 0.43 | 0.46 | 0.35 | -.66 |
| Source: CBRE | ||||||||
Related posts:
- http://www.foreclosureshomes.org/cap-rate-trends-in-2010-for-commercial-real-estate Cap Rate Trends in 2010 for Commercial Real Estate
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