3rd Quarter, 2017

Market Commentary™ Investor Survey Reports Cap Rate Index Decreases For All Property Types During 2nd Quarter 2017

Coincident with a seven basis point decrease in Treasury rates to which most commercial mortgage interest rates are indexed and a two basis point decline in equity dividend rates, the Weighted Composite (Cap Rate) Index™ decreased seven basis points, from 9.45 to 9.38 percent during the 1st Quarter of 2017.

The greatest quarter-over-quarter cap rate index decrease was recorded by the Restaurant sector, down 16 basis points, followed by the Special purpose sector, down 15 basis points during the same period.

The smallest quarter-over-quarter cap rate index decreases were recorded by the Office sector, down one basis point, followed by the Apartment and Self Storage sectors, both down four basis points.

Mortgage lending standards were relatively unchanged during the 2nd Quarter while spreads moved up somewhat resulting in an average permanent mortgage interest rate increase of six basis points.

Historical Cap Rate Indices

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