What’s Driving Capitalization Rate Compression?
As we continue to emerge from the COVID-19 pandemic, capitalization rates continue to shift and impact the investor market, particularly when it comes to industrial and multifamily assets.
My 40 years investing in value-add industrial, multifamily, and office properties have taught me to always keep a close eye on cap rates as they can provide insight into where investor interest is highest, helping to identify opportunities in new markets and sectors.
Cap rate compression generally indicates rising prices in the market, and it’s exactly what we’re seeing now within the value-add multifamily and industrial space.
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Principal, Tratt Properties, LLC
3 年Cliff, I cannot speak to the multi-family side of things but what you say regarding industrial is 100% correct! Well said!
Broker Associate, Multifamily Acquisitions Specialist ~ Partnership Builder & Leader ~ Senior Real Estate Developer ~ Deal Maker
3 年I have known Cliff for many years. He is right on the money concerning cap rate compression. Prices are getting a little crazy for multifamily deals. Sub 4.5 caps are the norm now in the Texas marketplace. Market correction is needed to make sense of acquisitions. Abundance of capital is driving this and I don’t see any immediate relief.
Founder/CEO The Brytar Companies
3 年Great observations from Mr Booth.
President & COO at Westmount Realty Capital, LLC
3 年Another great article from our Chairman, Cliff Booth.