Current Apartment and Multi Family Cap Rates

Here’s data from a few sources about cap rates, to help you determine what cap rate you should use for your Commercial Real Estate calculations.

Preliminary research indicates in the third quarter of 2010, investors wanted an average going-in cap rate of 6.6 percent for unleveraged apartment properties; according to Nick Fluellen, CCIM, Associate Vice President of Investments at Marcus & Millichap Real Estate Investment services in Dallas.

Cap rates from Real Capital Analytics website show cap rates from 5.88 to 6.77 for the top 10 US markets for apartment deals closed in the past 12 months over $10 mil.

In a November 2010 article, Mac Crowther, President at Apartment Realty Advisors stated the following: At present, cap rates that are being generated are Class A—5.5 percent-6.5 percent; Class B—7.25 percent-7.75 percent; Class C—8 percent-plus. These cap rates assume stabilized complexes and trailing 12 months actual performance. Capitalization rates are expected to continue to fall due to increased competition to acquire assets and the dramatic recent reduction in interest rates.

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