Capitalization rates for U.S. commercial real estate remained stable during the first half of 2019, including the retail sector, where demand for high-quality assets stayed strong, according to a new survey of capital-market professionals.
Cap rates represent the ratio between an asset's net operating income and the capital cost, or value, of that asset.
Retail cap rates for neighborhood/community centers were largely unchanged in the first half, at 7.48 percent, according to the report, titled CBRE North America Cap Rate Survey. This did not apply to power centers, however, a sector that was particularly affected by store closures, and which saw the average cap rate rise by six basis points, to 8.45 percent. Stabilized cap rates for class-A properties across all retail sectors ranged from 4.75 percent to 7.16 percent.
The average cap rate on power centers rose by six basis points, to 8.45 percent
Some 86 percent of respondents said they expect cap rates will remain stable for neighborhood and community center properties in the second half of 2019, and 80 percent said the same about power centers.
By Edmund Mander
Director, Editor-In-Chief/SCT
