cap rate

Sales and Leases

Gap narrowing between CRE financing and returns

The markets are pricing in five, quarter point interest rate increases in 2022 which will result in commercial mortgage rates ranging between 4 to over 5 per cent.

What will be the consequences of this increase to the commercial real estate investment market?

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Market

Surprisingly little correlation between interest rates and cap cates

Any discussion on cap rates needs to be prefaced with a cautionary note. 

That is, there are many factors that determine capitalization rates on a commercial real estate investment. 

Those factors include but aren’t limited to age and condition of improvements, covenant of tenants, term of leases, location, asset class and the tenant mix.

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