RealtyRates.com Investor Survey Reports Cap Rate Index Increases For All Property Types During 4th Quarter 2016
Coincident with a 77 basis point increase in Treasury rates to which most commercial mortgage interest rates are indexed and a three basis point decline in equity dividend rates, the RealtyRates.com Weighted Composite (Cap Rate) Index increased 31 basis points, from 9.30 to 9.61 percent during the 4th Quarter of 2016.
The greatest quarter-over-quarter cap rate index increase was recorded by the Special Purpose sector, up 43 basis points, followed by the Self Storage sector, up 39 basis points during the same period.
The smallest quarter-over-quarter cap rate index increase was recorded by the Restaurant sector, up 16 basis points, followed by the Golf sector, up 23 basis points.
Mortgage lending standards tightened somewhat during the 4th Quarter. Moreover, although spreads were down an average seven basis points, interest rates were nevertheless up 70 basis points.