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Capital Wall, Strong Economic Growth, Low Interest Rates Keep Cap Rates Stable

A wall of domestic and global capital, above-trend economic growth, and a continued low-interest rate environment led to broadly stable capitalization rates for U.S. commercial real estate assets in the first half of 2018, according to the latest research from global property advisor CBRE. The CBRE North America Cap Rate Survey showed cap rates remained broadly unchanged across the sectors in H1 2018, except for some retail segments.

CBRE’s Global Chief Economist Richard Barkham says, “The wall of capital targeting real estate is bigger than it has ever been, and there is some degree of difficulty in finding investments. Existing owners want to hold, and even if they are leveraged up, have the refinancing options to be able to do that. It is very competitive. Investors are keen to buy into the innovation that is taking place in real estate, particularly logistics and office markets.”

Industrial cap rates tightened the most, and multifamily rates edged down modestly. Office cap rates were generally stable, while the hotel sector also held firm. Continued cap rate stability is expected in H2 2018.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.