PricewaterhouseCoopers recently released their Q2 2010 Korpacz Real Estate Investor Survey results. Susan Smith, the editor-in-chief and a director in PwC’s real estate practice noted:
‘While most investors sense that the worst is over in terms of market deterioration, supply greatly outweighs demand across all property sectors keeping overall vacancy rates high and rental rates on a downward trend, top-tier locations are showing the most signs of life with respect to tenant interest and recovery potential. However, inspiring leasing trends have yet to fully materialize, further contributing to this sense of market flux.
‘There is a tremendous amount of capital targeting institutional-grade, quality assets. In fact, survey participants cited that strong competition among well-capitalized buyers is helping to elevate sale prices and lower overall cap rates for many prime properties. Furthermore, the low percentage of distressed trades as of late reflects investors’ preferences as most buyers are steering clear of “junk” and focusing only on core assets according to survey participants’.
In the quarterly survey, the average overall capitalization (cap) rate, a key measure of investors’ expectations of property income and value, declined in 17 of the survey’s 30 markets over the past three months, an indication that investors perceive less risk in the industry now, particularly for prime properties and better markets.
Relative to various property types, average capitalization rates fell across all property types, except Power Centers, Net Leases, and Flex/R&D.
Source: PWC Korpacz Real Estate Investor Survey
Regional Malls experienced the greatest cap rate decline, dropping by 41 basis points, from 8.34% to 7.93%
Can you provide me a resonable capitalization rate for self storage units in Santee, CA?
Terrence, thank you for the inquiry. I have not been able to find cap rates specific to Santee, CA, but it appears the national average self storage cap rate is about 7.75% as of Q4 2010, down from 8.45% as of Q2 2010, according to PwC’s Real Estate Investor Survey.
Cushman & Wakefield’s Self Storage Industry Group conducts a bi-annual investor survey for PwC’s Quarterly Real Estate Investors Survey (fka KORPACZ Investor Survey). The results of these surveys and other information on the Self Storage Industry can be found at:
http://www.selfstorageeconomics.com/
Furthermore, a complimentary version of PwC’s most recent survey covering the self storage industry can be found here:
2010 Q4: http://www.selfstorageeconomics.com/pdf/pwcinvestorsurvey4q10.pdf
2010 Q2: http://www.selfstorageeconomics.com/pdf/korpacz2q10.pdf
Hope this helps!
Do you have CAP rates for industrial buildings in Michigan?
Hello Mark. CBRE has a good cap rate survey which they conduct 2x’s a year. You can view the full Mid-2010 report here, but it looks like cap rates for industrial product in ranged from 9.0% to 11.0% in Detroit for stabilized, Class ‘A’ product.
I was trying to find cap rates for Billbaord sales in northern california? Any help would be greatly appreciated.
Thanks,
Mark
Mark – Sorry, not much help here. I’ve never seen any sources which cover billboard cap rates.
Do you have any info on cap rates for multi unit townhouse apartments, location Saratoga springs NY
Sorry Kathy, we do not.
Do you have any single family residential cap rates for Michigan?
Sorry, we do not cover the single family market.
WHAT IS A GOOD CAP RATE FOR A THEATER IN CUMMING GA
Kevin, it all depends on the credit of the tenant, the length of the lease, the type of lease and the location…..