RealtyRates.com Investor Survey Reports Modest Cap Rate Index Decrease For All Property Types During 1st Quarter 2016
Coincident with a 49 basis point decrease in Treasury rates to which most commercial mortgage interest rates are indexed, the RealtyRates.com Weighted Composite (Cap Rate) Index similarly decreased albeit a more modest 10 basis points, from 9.46 to 9.36 percent during the 1st Quarter of 2016.
The greatest quarter-over-quarter cap rate index decrease was recorded by the Apartment sector, down 25 basis points, followed by the Restaurant sector, down 21 basis points during the same period.
The smallest quarter-over-quarter cap rate index decrease was recorded by the Lodging sector, down five basis points, followed by the Industrial, Mobile Home/RV Park, Retail, and Self Storage sectors, all down six basis points.
Mortgage terms tightened a bit overall during the 1st Quarter, and spreads increased an average 32 basis points, while equity dividend rates were modestly lower overall.