Power center cap rates declined in second half

A cap rate, a property’s net operating income divided by its value, indicates the rate of return a buyer expects a deal to generated. Power centers and high-street retail properties landed on opposing ends of the cap-rate spectrum during that six-month period, as investors favored urban flagships over big-box-driven properties.

Cap rates for stabilized U.S. power centers climbed 8 basis points year-over-year in the second half of 2019 to 8.54 percent, while cap rates for value-add power centers grew 18 basis points to 10.43 percent, according to CBRE.

Cap rates for stabilized neighborhood and community centers remained flat at 7.47 percent, and cap rates for value-add neighborhood and community centers grew 1 basis point to 9.46 percent, according to the real estate services firm.

Meanwhile cap rates for high-street retail properties grew 2 basis points to 4.78 percent.

By comparison, among stabilized properties, suburban multi-family and suburban office cap rates each declined 11 basis points, industrial cap rates fell 13 basis points and hotel cap rates were stagnant.

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