Multifamily cap rates in the U.S. generally averaged between 5.7% and 6.1% as of late 2024 to early 2025, reflecting a period of relative stability after previous increases. While top-tier Class A assets often trade around 5%, Class B properties typically range from 5.5% to 7%, with higher cap rates found in riskier, non-prime markets. [1, 2, 3, 4]
Key Takeaways on Nationwide Multifamily Cap Rates:
• Average Range: The nationwide average generally hovers around 5.7%–5.9% for many multifamily deals.
• Market Segmentation: Class A properties often trade at lower cap rates (~4.74%–5%), while Class B/C assets often fall between 5% and 7%+.
• Recent Trends: Cap rates have shown stability recently, though some reports indicate slight compression (down 7 basis points in early 2025) while others suggest a slight uptick from 2024 levels.
• Regional Variation: Major city centers often see lower cap rates (4%–6%), while secondary and tertiary markets frequently see higher rates. [1, 2, 4, 5, 6, 7, 8]
Factors Influencing Rates:
• Interest Rates: As borrowing costs rise, cap rates generally increase (investors demand higher returns).
• Location: Assets in primary markets generally command lower cap rates than those in secondary or tertiary markets.
• Property Class: Class A (new, prime location) offers lower, safer returns, while Class C (older, value-add) carries higher risk and higher potential cap rates. [4, 5, 9, 10]
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Henry McClure
785.383.9994
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785.383.9994
sent from mobile 📱
time kills deals
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