What would a target CAP rate for an investor with >$500,000,000 Net Worth look like today versus 3 years ago?

I have an investor who wishes to hedge current US portfolio of residential eco-development property with long-term sale/leaseback agreements on single or 2/3 tenant commercial or industrial property. His preference would be 10,000 sq. ft or larger and his liquidity position should open doors to higher returns. Suggestions on market direction as my experience is showing 1-3 digit CAP increases: In Buying Property - Asked by Josh W. - Oct 9, 2008

Answer(s)

Glen W.

Lender/Mortgage Broker

Atlanta, GA

Josh.. with credit tighening, Cap rates are definitely rising. In Colorado, I am seeing retail centers that used to trade on a 7 cap, now trading at and 8 or 9 cap. The cap for the particular center you reference is going to be highly dependent on the local market. For example in a strong market like Bozeman, MT, cap rates have not adjusted much as opposed to a market like Miami. Good luck with your transaction. i wrote a blog about rising cap rates. It is definitely a wild ride in this real estate market.

Web Reference: http://fairviewlending.com/blog/

Oct 10, 2008

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