4th Quarter, 2016

Market Commentary™ Investor Survey Reports Cap Rate Index Decreases For Most Property Types During 3rd Quarter 2016

Coincident with a 24 point decrease in Treasury rates to which most commercial mortgage interest rates are indexed, the Weighted Composite (Cap Rate) Index™ decreased a modest three basis points, from 9.33 to 9.30 percent during the 3rd Quarter of 2016.

The greatest quarter-over-quarter cap rate index decrease was recorded by the Golf and Lodging sectors, both down 13 basis points, followed by the Mobile Home/RV Park sector, down nine basis points during the same period.

The greatest quarter-over-quarter cap rate index increase was recorded by the Office sector, up 12 basis points, followed by the Self Storage sector, up three basis points. The Industrial sector, the only other sector to record an increase during the 3rd quarter, was up two basis points.

Mortgage terms remained largely unchanged overall during the 3rd Quarter, with spreads unchanged on average, while equity dividend rates were down just one basis point.

Historical Cap Rate Indices

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