1st Quarter, 2016

Market Commentary™ Investor Survey Reports Modest Cap Rate Index Increase For Most Property Types During 4th Quarter 2015

Coincident with a nine basis point increase in Treasury rates to which most commercial mortgage interest rates are indexed, the Weighted Composite (Cap Rate) Index™ similarly increased a modest six basis points, from 9.40 to 9.46 percent during the 4th Quarter of 2015, with all but one of the 11 property categories recording cap rate index increases during the quarter.

The greatest quarter-over-quarter cap rate index increases were recorded by the Healthcare/Senior Housing, Industrial, Office and Retail sectors, all up eight basis points, followed by the Self Storage sector, up seven basis points during the same period.

The only quarter-over-quarter cap rate index decrease was recorded by the Lodging sector, down seven basis points.

Mortgage terms again eased a bit overall during the 4th Quarter, however spreads increased somewhat for all property types, while equity dividend rates were modestly lower overall.

Historical Cap Rate Indices

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