RealtyRates.com Investor Survey Cap Rate Indices Largely Down During 1st Quarter 2014
Consistent with a negligible one basis point increase in Treasury rates to which most commercial mortgage interest rates are indexed, the RealtyRates.com Weighted Composite (Cap Rate) Index declined a similarly small four basis points during the 1st Quarter of 2014, with eight of the 11 property categories also recording cap rate index decreases during the quarter.
The greatest quarter-over-quarter cap rate index increase was recorded by the Special Purpose sector, up 24 basis points, followed by the Industrial and retail sectors, both up two basis points during the same period.
The greatest quarter-over-quarter cap rate index decrease was recorded by the Office sector, down 19 basis points, followed by the Lodging sector, down 10 basis points during the 1st Quarter.
Mortgage terms again eased a bit overall during the 1st Quarter, although spreads increased slightly for some property types, while equity dividend rates were down somewhat for most property types.