1st Quarter, 2022

Market Commentary™ Investor Survey Reports Modest Cap Rate Index Very Modest Decreases For All Property Types During 4th Quarter 2021

Coincident with a 25 basis point increase in Treasury rates to which most commercial mortgage interest rates are indexed, together with an 87 basis point decrease in equity dividend rates, the™ Weighted Composite (Cap Rate) Index™ decreased a very modest two basis points from 8.77 to 8.75 percent during the 4th Quarter of 2021.

The greatest quarter-over-quarter cap rate index decrease was recorded by the Apartment sector, down eight basis points, followed by the Golf sector, down six basis points.

The smallest quarter-over-quarter cap rate index decreases were recorded by the Healthcare/Senior Housing, Industrial, Lodging, Mobile Home/RV Park, Office, Retail and Self Storage sectors, all down one basis point, followed by the Restaurant and Special Purpose sectors, down two basis points.

Mortgage lending standards were somewhat eased on stronger demand for both multifamily and nonresidential loans during the 4th Quarter. Meanwhile spreads were down seven basis points overall, but average permanent mortgage rates were up 18 basis points.

Historical Cap Rate Indices

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