Are Cap Rates Stabilizing?

Are capitalization rates stabilizing? That’s the $64.00 question for sellers, buyers and brokers. In 2023, transactional volume for most property types was down by 80%+. Thus far in 2024, transactional volume hasn’t picked up dramatically but it ‘feels’ different to this commercial real estate guy. There’s talk that the Fed may lower the Federal Funds Rate one to three times before the end of the year. I’m predicting to clients that even one 25 basis point move down will likely invigorate the marketplace and some former would-be sellers will become real-time sellers. Time will tell.
Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on asset management, brokerage listings and sales, and all aspects of a multifamily investment. Specific diligence regards property operations and strategies to maximize asset performance and value. Additionally, the firm assists owners regarding economic, financial and market factors that impact returns on investment. The firm targets ‘Mid-Tier’ assets which it defines generally as 10-to-60-unit properties.
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