Cap Rates for Commercial Real Estate Assets Stable in H1 2019

According t? global property ?dv???r CBRE, an advantageous balance ?f m?d?r?t? gr?wth, l?w ?nfl?t??n, ?nd falling long-term interest r?t?? ?n th? U.S. kept ????t?l?z?t??n r?t?? f?r ??mm?r???l r??l ??t?t? ????t? broadly ?t?bl? ?n the f?r?t h?lf ?f 2019.

Th? CBRE North America Cap Rate Survey found th?t multifamily ?nd ?ndu?tr??l ??? r?t?? t?ght?n?d th? m??t in H1 2019, wh?l? office, r?t??l and h?t?l ??? rate movements w?r? m?r? modest. C?nt?nu?d cap r?t? ?t?b?l?t? ?? ?x???t?d ?n th? r?m??nd?r of 2019, with th? h?t?l ???t?r ?x??r??n??ng th? most mixed ??nt?m?nt.

“Wh?l? th? f?rtun?? of th? gl?b?l ???n?m? ?h?uld b? watched ?l???l? du? t? ?n?r????d t?n???n? ?v?r trade w?th China, Persian Gulf hostilities, ?nd the ?r?????t ?f a hard Brexit, th?r? ???m? to b? sufficient economic m?m?ntum ?nd m?n?t?r? ??l??? fl?x?b?l?t? ?n th? U.S. t? sustain real ??t?t? prices. Wh?l? ??n??rn? ?r? h??ght?n?d, we h?v? ???n n? ?v?d?n?? ?f ?nv??t?r? ‘hitting th? ??u?? button’; indeed, th? ????t?t? f?r r??l ??t?t? fr?m d?bt ?nd equity ????t?l r?m??n? v?r? ?tr?ng,” said R??h?rd Barkham, Global Ch??f E??n?m??t, CBRE.

Off??? cap r?t?? f?r stabilized CBD ?r???rt??? d??r????d ?l?ghtl? t? 6.67% in H1 2019, w?th Cl??? AA properties in T??r II m?rk?t? r?g??t?r?ng the l?rg??t decrease (-12 b??), l?k?l? r?fl??t?ng a ?h?ft b? ?nv??t?r? ?nt? h?gh-?u?l?t? ?r???rt??? ?n secondary markets. St?b?l?z?d ?uburb?n office ??? rates r?m??n?d ?t 7.91%, supported b? improving m?rk?t fundamentals, but ??r??d? to CBD ??? rates are n??r th??r h?gh??t levels this cycle, get more crucial information about real estate on

“Office cap r?t?? ?h?uld r?m??n ?t?bl? for both CBD ?nd ?uburb?n ?r???rt??? ?v?r the n?xt ??x months, ?u???rt?d b? ?tr?ng t?n?nt d?m?nd f?r ?????, favorable investment sentiment, ?nd ?x???t?t??n? for stable ?r decreasing ?nt?r??t rates,” ???d Chris Lud?m?n, CBRE’s Global Pr???d?nt ?f Capital Markets.

Industrial ?nd logistics ??? r?t?? and r?turn? ?n ???t remained ?t historically l?w levels ?n H1 2019. The average r?t? f?r ???u???t??n? of ?t?b?l?z?d ?ndu?tr??l ????t? for all tiers ?nd ?l????? f?ll b? 5 b?? t? 6.27%. Cl??? A ??? rates d??l?n?d 5 b?? to 5.00%, th? lowest l?v?l ??n?? CBRE’? C?? R?t? Survey b?g?n ?n 2009. Alth?ugh cap r?t? d??r????? b? ?l??? w?r? m?d??t on average, they ??nf?rm ?nv??t?r preferences f?r Cl??? B ????t? in Tier II and T??r III markets where th? largest ??? rate ??m?r?????n ???urr?d.

“Strong m?rk?t fund?m?nt?l?–l?w v???n??, robust ?-??mm?r?? driven tenant demand and r?nt gr?wth–??nt?nu? t? ?ttr??t ?nv??t?r? t? industrial ????t?, increasing v?lu?? ?nd leading t? ?u?t??n?d cap rate ??m?r?????n. Du? t? h?gh ??m??t?t??n f?r core properties, investors r?m??n ?nt?r??t?d ?n assets w?th a higher r??k ?r?f?l?. Inv??t?r? ?r? looking b???nd ???r-?n? ??? r?t?? ?nd to th? ?n?r????ng r?turn? provided b? predictable r?nt?l rate gr?wth thr?ugh?ut th? life ?f the d??l,” said J??k Fr?k?r, CBRE’? Gl?b?l H??d of Indu?tr??l & L?g??t???.

R?t??l ??? r?t?? f?r stabilized gr???r?-?n?h?r?d neighborhood/community centers r?m??n?d ?t?bl? ?t 7.48% ?n H1 2019, ??nf?rm?ng f?rm ?r???ng tr?nd? ?nd ?tr?ng ?nv??t?r interest. B?g-b?x ?nd ?th?r r?t??l?r ?l??ur?? continued t? influence th? ??r???v?d r??k ?r?f?l? f?r ??w?r ??nt?r?, with average ??? r?t?? ?n?r????ng by 6 b?? t? 8.45%. High-street cap r?t?? were r?l?t?v?l? ?t?bl? ?nd r?m??n?d the l?w??t ?f all retail ?r???rt? categories at 4.76%. D?m?nd f?r high-quality retail assets w?? strong, w?th Class A ?r?du?t ?n all thr?? r?t??l sectors th? lowest, r?ng?ng from 4.76% to 7.16%. Expectations f?r ??? r?t? movement ??r??? r?t??l segments ?? r?l?t?v?l? un?f?rm ?v?r the n?xt ??x m?nth?

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