• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Limon Net Lease Group

Limon Net Lease Group

  • Listings
    • National Listings
    • NYC Metro Listings
  • Who We Are
  • 1031 Exchange
  • Research
  • Financing
  • Services
    • Advisory
    • Capital Markets
    • Marketing
    • Research
    • Technology
  • Contact

Will Cap Rates Rise Due to Increasing Interest Rates?

May 16, 2022 by Marcus & Millichap Research Services

Will Rising Interest Rates Put Upward Pressure on Cap Rates?

Interest Rates and Cap Rates Not Directly Correlated

  • Some investors think sellers must raise cap rates when interest rates increase in order to draw in enough buyers
  • This has not held up historically, spread between interest and cap rates have varied significantly
  • Yields can vary greatly by property type and market

Many Factors Currently Impacting CRE Yields

  • Elevated liquidity forcing investors to compete for assets, willing to accept lower yields to invest capital
  • Stock market volatility likely to drive investors to stability of CRE, putting downward pressure on cap rates
  • Property types and markets with momentum or value-add opportunity draw new interest, keeping cap rates steady

Investors Need to Consider Future CRE Trends

  • Demographics to reshape CRE; Retiring Baby Boomers and aging Millennials will drive certain property types
  • Paying a premium now could provide opportunity for elevated returns over next few years
  • Upward cap rate momentum in some markets and property types expected, unlikely to be broad-based

*Through May 11
Includes apartment, retail, office, and industrial sales $1 million and greater
Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics, Federal Reserve

Watch the Video Below

 

Filed Under: Research Brief

Primary Sidebar

Recent Posts

  • February FED Meeting CRE Implications
  • Three Factors Driving Investor Uncertainty
  • Best Property Types on a Five Year Horizon
  • How the Labor Market is Impacting the Economy
  • What’s in Store For Investors in 2023?

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • March 2020

Categories

  • Agent Opinion
  • Apartments
  • Client Webcast
  • Employment
  • Eviction Moratorium
  • Fox Business
  • GDP
  • Investor Sentiment Survey
  • M&M In the Media
  • Market Report
  • Multifamily
  • Multifamily
  • NYC Metro
  • Outlook Report
  • Research Brief
  • Retail
  • Self-Storage
  • Special Report

Footer

© 2023 Limon Net Leased Group

  • Listings
    • National Listings
    • NYC Metro Listings
  • Who We Are
  • 1031 Exchange
  • Research
  • Financing
  • Services
    • Advisory
    • Capital Markets
    • Marketing
    • Research
    • Technology
  • Contact

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2020 Marcus & Millichap and Limon Net Lease Group

Privacy Policy