cbre north america caprate 2014h1 master

8/15/2019 CBRE North America CapRate 2014H1 Master

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CBRE CAP RATE SURVEY

Click to Enter

A CBRE Publication First Half 2014

In This Issue:

Overview pg 2

Office pg 8

Multifamily pg 17

Retail pg 26

Industrial pg 36

Hotels pg 41

App endi x pg 45


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IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix

Cap Rate SurveyFirst Half 2014

2

>United States | Overview

Key National Observations

• The CBRE Cap Rate Survey for mid-year 2014 points tomeaningful declines in national average cap rates for thefollowing property sectors:

» Industrial (approximately 20-30 basis points (bps)

» Class A, Retail Neighborhood Centers and Power Centers(both by approximately 30 bps)

» Central Business District Hotels (20-35 bps)

• Cap rates for office, multifamily , and suburban hotel propertiessaw little change at the national level. Rising cap ratesin a number of gateway office markets and decliningcap rates in a number of non-gateway office marketsessentially offset each other, leaving the national statisticsvirtually unchanged, but pointing to a shift in investor focus.

• High street retail exhibited the greatest absolute changein cap rates with a 36 bps decline, taking it to a nationalaverage cap rate of 4.45%, compared to 4.81% from theprevious half. High street retail represents the smallest

sample size in the survey; this property subtype is comprisedsolely of prime retail shopping thoroughfares in tenurban submarkets serving as focal points for high-end shopsand luxury retailers. The decline in high street retail cap ratesis aligned with the trend of increased demand forthis investment type as the recovery progresses andhas now pushed the average cap rates for this sectorbelow that of in-fill Class A multifamily assets.

• Class A neighborhood center cap rates declined by 32 bps;Class B neighborhood center cap rates were essentially flat;Class C neighborhood center cap rates rose by 29 bps,pointing to a perception of greater variation in risk across thevarious retail asset classes and subtypes. Power center caprates moved in a more uniform fashion, however, with allclasses declining by approximately 30 bps. The greaterdifferentiation in cap rates seen in neighborhood centers hasnot carried over to power centers in our survey results.

• Across all of the property types surveyed, CBRE CapitalMarkets and Valuation professionals anticipate that between75% and 80% of markets will see little to no change in caprates over the next six months, while 20% to 25% of marketswill see contracting cap rates. Only a handful of marketsare anticipated to see rising cap rates over the nextsix months, and in most cases, the rise in cap ratesin these markets are anticipated to be less than 25 bps.

• Along with an exploration of the survey results, CBRE analyzes

the expectations and realities of recent and potentialfuture movements in interest rates and cap rates,with a focus on the industrial sector.


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IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


3

>United States | Overview (continued)

National Level Stabilized Capitalization Rates (by section, class and/or segment)

Sector Class/Segment 2013 Q4 2014 Q2 BPS Change BPS Spread to Treas.

CBD Office

A 5.49% 5.53% 4 291

B 6.92% 6.91% -1 429

C 8.95% 8.85% -10 623

Suburban Office

A 6.67% 6.63% -4 401

B 7.95% 7.81% -14 519

C 9.41% 9.30% -11 669

Industrial

A 6.25% 5.97% -28 335

B 7.36% 7.04% -32 442

C 8.56% 8.33% -23 571

Retail-Neighborhood Centers A 6.25% 5.93% -32 331B 7.15% 7.14% -1 452

C 8.43% 8.72% 29 610

Retail-Power Centers

A 6.82 6.52 -30 390

B 7.72% 7.41% -31 479

C 8.71% 8.44% -27 582

Retail-High Street A 4.81% 4.45% -36 183

Multifamily - Infill

A 4.64% 4.59% -5 197

B 5.16% 5.18% 2 256

C 5.93% 5.95% 2 333

Multifamily - Suburban

A 5.32% 5.29% -3 267

B 5.93% 5.82% -11 320C 6.89% 6.75% -14 413

CBD Hotels

Economy 9.03% 8.69% -34 607

Full Service 7.54% 7.54% 0 492

Luxury 6.94 6.66% -28 404

Select Service 8.06% 7.88% -18 526

Suburban Hotels

Economy 9.62% 9.60% -2 698

Full Service 8.03% 8.14% 11 552

Luxury 7.48% 7.35% -13 473

Select Service 8.38% 8.32% -6 570

Source: CBRE Cap Rate Survey; Federal Reserve for Treasury rates, 2014.


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IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


4

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Interest Rates and Cap Rates: Expectations and Reality

Last year, the investment markets were in turmoil after the FederalReserve Bank announced its intentions to begin tapering itsQuantitative Easing (QE) program. There was a great deal of fearat this time that this tapering would sink the commercial real estatemarket, but the reality has been far gentler.

The QE program helped hold down the long-end of the yieldcurve in an attempt to incentivize long-term investments that might

spur economic growth. The long-end of the yield curve surged on

this news and between May 1 and August 1, 2013, the 10-yearTreasury (UST) shot up 110 bps. The fear at the time was that thisturmoil with interest rates would boil over to push up cap rates.That turmoil is well in the past and did not impact the commercialproperty markets negatively. This says something about where caprates will likely be headed in the future.

Every month the Wall Street Journal conducts a survey ofprofessional economists asking for their views on future trendson a variety of economic indicators. The following chart highlightsthe consensus view for the UST in August of 2013. At the time, theseeconomists expected the UST to climb to 3% by mid-year 2014. Inreality, the average for the second quarter was 2.62%. While thesimple explanation for this is that economists sometimes get thingswrong, there are other factors that were holding back the expansionof rates on the long end of the yield curve.

The consensus published in August 2013 was set in the previousmonths when the averages for the second quarter were not yetin place. Participants expected that the UST would go up,just not as quickly as it did, as many simply could not quantify

the fear reaction that took hold when the tapering of the QEprogram was announced. The “animal spirits” of the market movedmuch more quickly in the near-term than economic models couldanticipate. After that initial shock, the modeled approach also failedrelative to reality.

Along the way, expectations for future growth shifted downward.There is a simple relationship one can use to determine whereinterest rates should be given expectations for economic growthrates and the overall rate of inflation, and any downward shift

United States | Overview (continued)

August 2013 Consensus Reality Trend

Ten Year Treasury, %

1.5

4.0

3.5

3.0

2.5

2.0

2 0 1 3

. 1

2 0 1 4

. 3

2 0 1 4

. 2

2 0 1 4

. 1

2 0 1 3

. 4

2 0 1 3

. 3

2 0 1 3

. 2

2 0 1 5

. 1

2 0 1 4

. 4

2 0 1 5

. 3

2 0 1 5

. 2

2 0 1 5

. 4

Source: WSJ Consensus Survey August 2013, CBRE Research Calculations, 2014.

Trend for the 10-year Treasury

did not Quite Hit Fears from a Year Ago


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Overview

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Retail

Industrial

Hotels

Appendix


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in growth expectations should lead to lower levels on the long end

of the yield curve. The expectations on growth have moved a greatdeal over the last year.

As shown in the following chart, the expectations for future growthdomestic product (GDP) growth by participants in the OpenMarket Committee of the Federal Reserve Bank have shifted downsignificantly from March 2013 to June 2014. The views of theseCommittee members are important as this is the interest rate settingboard for the Federal Reserve Bank

During this timeframe, as future growth expectations have

downshifted, cap rate spreads to Treasuries have generallynarrowed as well. For example, the mid-year 2014 CBRECap Rate Survey shows that in the industrial sector, the averagecap rate for stabilized Class A assets now stands at 5.97%.Throughout the second quarter, the 10-year UST averaged 2.62%,

yielding a 335 bps spread between the “risk-free” asset versusthe 426 bps spread observed six months ago in our last survey.Has the spread of Class A industrial asset cap rates over Treasuriesnow reduced as far is it might? Would a move to 4.25% for the10-year Treasury imply a corresponding cap-rate shift up to 7.60%

for high-quality industrial assets?

If cap rates for stabilized Class A industrial assets move from5.97% to 7.60% in two years, asset values would be obliterated,suffering a roughly 27% decline—assuming there are no changesin property income. This line of thinking is flawed, however,as there is not a constant spread between cap rates and interestrates over time. The following chart shows the appraisal-basedcap rate data for high-quality industrial assets held by investmentmanagers contributing data to National Council of Real Estate

Investment Fiduciaries (NCREIF) have exhibited a roughly 300

bps spread to the 10-year Treasury. The comparable spread forthe CBRE Cap Rate Survey figure would be roughly 360 bps,given CBRE’s inclusion of data in secondary and tertiary marketswhere NCREIF is typically under-represented.

The spread between cap rates and interest rates has not remainedconstant over time, just as investor perceptions of the risks inthe industrial sector have not remained constant. This is truefor all major property sectors, with the perception of risk risingand falling. For high quality industrial assets, it appears that


2.4-2.5 2.6-2.7 3.2-3.3

June 2013

Number of Participants

10

1

2

3

4

5

6

7

8

9

0

March 2013 June 2014

3.4-3.5

Ranges on Long-Term GDP Growth Expectations

3.0-3.12.8-2.92.2-2.32.0-2.11.8-1.9

Growth Expectations of Federal Reserve

Open Market Committee Members Downshifting

Source: Federal Open Market Committee (FOMC) Meeting Notes, CBRE Research Calculations, 2014.


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Overview

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Multifamily

Retail

Industrial

Hotels

Appendix


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the risk spread over Treasuries remains at a reasonable level,and based on historical data, may even have room to narrow a bitmore in response to rising interest rates, while still remaining withinthe range of the historical observations noted in the chart above.

Review of Fundamentals by Property Sector

By mid-year 2014, the office vacancy rate was at 14.5%nationally, versus 15.2% for mid-year 2013. This 70-bps declinein the ofce vacancy rate came about from declining vacancy

in both CBD and suburban submarkets. The vacancy rate for

CBD submarkets fell 50 bps from one year earlier to hit 11.8%.The vacancy rate for suburban submarkets fell more quickly,however, dropping 90 bps from a year earlier to hit 15.9%.Overall, there is still more slack capacity in the suburbansubmarkets, making it easier for the gure to fall more quickly.Of note, the 15.9% level is now just under the 16.1% averagelevel recorded since 1988 and rent pressures should begin to buildin many suburban submarkets. CBD vacancy rates, by contrast,are now well below the long-term average of 12.8%, with manyCBD submarkets exhibiting healthy rent trends for some time now.

The national industrial availability rate reduced to 10.8% as ofmid-year 2014, from 11.9% at mid-year 2013. This year-over-

year improvement is in keeping with a trend of approximately 100bps improvements over each year since the worst of the recessionin 2008 when the availability rate stood at 14.5%. Should thistrend continue, the national availability rate for industrial wouldreduce to a level below the long term average of 10.0% by the rsthalf of 2015. As a result of the tightening availability rate, averageasking rents have risen 4.4% over the past year, following several

years of declining or at rent growth throughout the early stagesof the recovery from the recession.

The retail sector has lagged other property types throughoutthe recovery period; however, retail leasing is now catching up withother property sectors and availability rates are down 50 bps from a year earlier, having fallen to 11.7% by mid-year 2014. Nationally,net absorption has improved signicantly over the last two yearswith average annual absorption of over 25 million square feet.This level is half of the long term average seen from 1992-2007,


Cap Rate Spreads to the Ten-Year Treasury

are Not Constant

Source: NCREIF, Federal Reserve Bank, CBRE Research Calculations, 2014.

0

50

100

150

200

250

300

350

400

450

500

1 9 9 3 .

1

1 9 9 4 .

1

1 9 9 5 .

1

1 9 9 6 .

1

1 9 9 7 .

1

1 9 9 8 .

1

1 9 9 9 .

1

2 0 0 0 .

1

2 0 0 1 .

1

2 0 0 2 .

1

2 0 0 3 .

1

2 0 0 4 .

1

2 0 0 5 .

1

2 0 0 6 .

1

2 0 0 7 .

1

2 0 0 8 .

1

2 0 0 9 .

1

2 0 1 0 .

1

2 0 1 1 .

1

2 0 1 2 .

1

2 0 1 3 .

1

2 0 1 4 .

1

BPS Spread, Warehouse Cap Rates to Ten Year

Spread 1993 to 2014 Average

Average of 300 BPS Spread since 1993


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IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


7

>United States | Overview (continued)

but represents a signicant turnaround from the extremely limited

absorption of the early period of the recovery from the recession,and a dramatic improvement from the negative net absorption of28 million square feet that occurred in 2009.

Multifamily continues to enjoy the healthiest fundamentals amongthe main property sectors. Vacancy stood at 4.4% at mid-year2014, down from 4.6% a year earlier. The long-term averagevacancy rate for the sector is between 5.0% and 6.0%, and asdemand continues to grow, rents are climbing as well, albeit at aslower pace than the prior two years. Effective market rents are up2.6% from a year earlier, but rents were up nearly 5.0% in 2011.Renters can absorb only so much of a rent increase. Still, while rentsare not growing as quickly as they have in the past, cap rates forthe multifamily sector remain the lowest among the major propertysectors. For Class A stabilized assets in urban locations, cap ratescame in at a national average rate of 4.59%, a 5 bps declinefrom the last survey in March 2014. Inll urban Class B and Caverage cap rates were nearly unchanged at 5.18% and 5.95%,respectively.

In the hotel sector, the revenue per available room (RevPAR)

continued to grow throughout the rst half of 2014.In the full-servicesegment, RevPAR was up 7.5% from a year earlier, while the limited-service sector RevPAR was up 10.7% from mid-year 2013.This paceof RevPAR growth is up compared to the growth rates seen in 2013,when growth in RevPAR slowed somewhat following the 8.0%-9.0%pace of 2010-2012. In the limited-service sector, for instance, theaverage pace of annual RevPAR growth from the middle of 2010through the middle of 2012 was 8.0%. The supply of rooms wasfairly constrained during that time frame, however. The CBRE CapRate Survey shows that investors are placing the most value on the

RevPAR trends from the luxury segments for assets in CBD locations,with an average 6.66% cap rate across markets. The economysegments meanwhile have an average cap rate of 8.69%, thoughthe range is fairly wide, with markets falling anywhere from 7.25%to 10.88% on the spectrum.


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IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


8

>Office | Overview

CLICK TO DOWNLOAD

Select from the list below to access the current office key ratios, forecasts and maps.

CBD

Complete Office CBD Current Key Ratios Chart (PDF)

Complete Office CBD Current Forecast Chart (PDF)

Complete Office CBD Current Key Ratios Map (PDF)

Investment volume in the office sector in the 12 months ending at mid-year 2014 was up 30.9% compared to the year-earlier period,

with total volume of $115.8 billion, according to Real Capital Analytics (RCA). To put this figure into perspective, office transaction volumeaveraged about $108 billion per year from 2004 to 2006. Volume is still down from the record $213 billion pace recorded in 2007,but those figures represented an artificial high from the unwinding of REITs to the private market. The volume of sales in suburbansubmarkets has been growing at a faster pace than in the CBD submarkets. Of note, the suburban submarkets accounted for approximately51% of office transaction volume during the past 12 months. This shift towards greater volume in suburban submarkets is significant,as that segment saw sales grow at a slower pace in the early stages of the economic recovery when investors were mostly focusedon CBD office investments.

This edition of the CBRE Cap Rate Survey reflects very limited change in both CBD and suburban office cap rates. The greatest changewas in Class C suburban office which saw a 10 bps contraction in the national average cap rate. Going forward, CBRE Capital Marketsand Valuation professionals expect that across the 40 suburban markets surveyed, cap rates for stabilized Class A assets will contractin 23 markets over the next six months, while 17 markets are expected to be flat. In CBD submarkets, the same basic pattern is in place,with cap rates for stabilized Class A expected to contract in 18 markets, remain flat in 22, and expand slightly in one market.Overall, where cap rates are expected to contract, the movement will be less than 25 bps, but greater contraction is anticipatedin Atlanta, Charlotte and Detroit.

Aside from the pivot towards greater interest in suburban investments, another notable trend in the office sector is a shift towardsomewhat higher cap rates in a few key gateway and major markets and lower cap rates in a few non-gateway and secondary markets.Notable examples of stabilized Class A office cap rates rising in this survey as compared with the last edition include New York (+50 bps);Los Angeles (+75 bps); and Dallas (+50 bps). Secondary and tertiary markets showing contracting Class A stabilized office cap ratesinclude Baltimore, Charlotte, Indianapolis, Austin, Orlando, Albuquerque, and Denver; all with reductions of 50-100 bps. Clearly investors

have broadened their horizons well beyond gateway CBD markets as both the volume of transactions and cap rates reflect this trend.

SUBURBAN

Complete Office Suburban Current Key Ratios Chart (PDF)

Complete Office Suburban Current Forecast Chart (PDF)

Complete Office Suburban Current Key Ratios Map (PDF)

http://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeCBD_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeCBD_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_OfficeCBD_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeSuburban_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeSuburban_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_OfficeSuburban_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeCBD_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_OfficeSuburban_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeSuburban_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_OfficeCBD_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeCBD_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_OfficeSuburban_KeyRatios.pdf


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IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


9

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FORECAST TRENDS*

Class A Class B Class CStabilizedCap Rates

Return on Costfor Value-Add

StabilizedCap Rates


StabilizedCap Rates


BaltimoreBostonCharlotteNew York PhiladelphiaPittsburghRaleigh Washington, D.C.

Office CBD | Eastern Region

Decrease

Remain Flat

Increase

* Forecast trends represent the CBRE professionals’ opinion on where ratios are likely to trend in the 2nd half of 2014 in their local market.

Class A Class B Class C

StabilizedCap Rates Comparedto 2H13 Return on Costfor Value-Add Comparedto 2H13 StabilizedCap Rates Comparedto 2H13 Return on Costfor Value-Add Comparedto 2H13 StabilizedCap Rates Comparedto 2H13 Return on Costfor Value-Add Comparedto 2H13

Baltimore 6.25% - 7.00% I 8.00% - 8.50% ↓

8.00% - 8.50% ↓

9.00% ↓

N/A N/A N/A N/A Boston 4.50% - 5.00% I 6.00% - 7.50%

↓5.75% - 6.25% ↓ 7.00% - 8.50%

↓6.50% - 7.00% I 9.25% - 10.25%

↓

Charlotte 6.25% - 6.50% I 8.00% - 8.50% ↓

7.00% - 7.25% I 8.50% - 9.00% ↓

8.00% - 8.25% ↓

10.00% INew York 4.50% - 5.00% ↓ 6.00% - 6.50% ↓ 5.00% - 6.00% ↓ 6.50% - 7.00% ↓ N/A N/A N/A N/A Philadelphia 6.50% - 7.25%

↓7.50% - 8.50% ↓ 7.50% - 8.00%

↓8.50% - 9.50% ↓ 8.50% - 9.00%

↓9.50% - 10.50% ↓

Pittsburgh 7.00% - 8.00% ↓

8.00% - 8.75% ↓

8.50% - 9.00% I 9.00% - 9.75% ↓

11.00% - 11.50% I 11.00% - 12.00% IRaleigh 6.25% - 7.00%

↓7.50% - 8.50% ↓ 7.25% - 8.00%

↓8.75% - 9.25% I 8.00% - 10.00%

↓9.50% - 11.00%

↓

Washington, D.C. 4.50% - 5.50% ↓

5.50% - 6.50% ↓

5.00% - 6.00% ↓

6.50% - 7.50% ↓

7.50% - 8.00% ↓

7.50% - 8.50% ↓


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Chicago 5.00% - 5.75% ↓

7.00% - 7.50% ↓

6.75% - 7.50% ↓

8.50% - 9.50% ↓

7.50% - 8.50% ↓

8.75% - 10.75% ↓

Cincinnati 7.50% - 8.00% ↓

8.50% - 9.00% ↓

8.50% - 9.00% ↓

10.00% - 10.50% ↓

10.00% - 11.00% ↓

12.00% - 13.00% ICleveland 9.50% - 10.00% ↓ 10.00% - 11.00% ↓ 10.00% - 10.50% I 11.00% - 12.00% ↓ 12.00% + ↓ 13.00% + ↓Columbus 7.50% - 8.50% I 8.00% - 9.75%

↓8.50% - 9.50% I 9.75% - 10.75% I 10.00% - 11.50% I 11.00% - 12.00% I

Detroit 9.00% - 10.00% I 9.50% - 12.00% I 10.00% - 12.00% I 10.00% - 14.00% I 12.00% - 14.00% I 12.00% - 15.00% IIndianapolis 7.50% - 8.00%

↓8.50% - 9.50%

↓8.00% - 8.50%

↓9.50% - 10.00%

↓8.75% - 9.25%

↓10.00% - 11.00%

↓

Kansas City 8.25% - 8.75% I 8.25% - 8.75% I 9.50% - 10.50% I 9.50% - 10.50% I 11.00% - 12.00% I 11.00% - 12.00% IMinneapolis 5.50% - 6.50%

↓7.00% - 8.00%

↓7.50% - 8.50%

↓9.00% - 10.00%

↓9.00% - 10.00%

↓11.00% - 13.00%

↓

St. Louis 8.00% - 9.00% I 7.50% - 8.50% I 8.50% - 9.50% I 8.00% - 9.00% I 9.50% - 10.50% I 9.00% - 10.00% I



Office CBD | Midwestern Region

Decrease

Remain Flat

Increase


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


ChicagoCincinnatiClevelandColumbusDetroit IndianapolisKansas City MinneapolisSt. Louis


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Office CBD | Southern Region

Decrease

Remain Flat

Increase


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


Atlanta AustinDallasHouston JacksonvilleMemphisMiami

NashvilleOrlandoSan AntonioTampa

Atlanta 6.00% - 7.00% ↓

7.00% - 7.50% I 7.00% - 8.00% I 7.50% - 8.50% I 8.00% - 9.75% ↓

9.00% - 11.00% ↓ Austin 5.00% - 5.25%

↓6.00% - 6.50%

↓6.50% - 7.00%

↓7.00% - 7.50%

↓8.00% - 8.50% I 8.50% - 9.00%

↓

Dallas 6.50% - 7.00% ↓

8.50% - 9.00% ↓ 8.00% - 9.00% I 10.00% - 11.00% ↓ 9.00% - 11.00% I 11.00% - 12.00% ↓Houston 5.50% - 6.50% I 7.00% - 7.75% ↓ 6.50% - 7.50% ↓ 8.00% - 9.00% I 8.00% - 9.00% I 10.00% - 12.00% I Jacksonville 8.00% - 9.00% I 9.50% - 10.50% I 9.50% - 10.25% ↓ 10.00% - 11.00% I 10.50% - 12.00% ↓ 12.00% + IMemphis 8.50% - 9.50% I 9.00% - 10.00% I 9.00% - 10.00% I 11.00% - 12.00% ↓ 11.00% - 12.00% I 12.00% + IMiami 5.00% - 5.75%

↓6.50% - 7.50% I 6.00% - 7.00%

↓6.75% - 7.75% I 7.00% - 7.50%

↓7.50% - 9.00% ↓

Nashville 6.50% - 7.00% I 7.50% - 8.00% I 8.00% - 8.50% I 9.00% - 9.50% I 9.00% - 9.50% I 10.00% - 10.50% IOrlando 6.00% - 6.50%

↓6.50% - 7.00%

↓6.50% - 7.00%

↓7.00% - 8.00%

↓7.50% - 8.00%

↓8.00% - 8.50%

↓

San Antonio 6.50% - 7.75% ↓ 7.75% - 8.25% I 7.75% - 8.50% ↓ 8.25% - 8.75% I 8.50% - 9.00% ↓ 8.75% - 9.50% ↓Tampa 6.50% - 7.50% I 7.00% - 8.50%

↓7.75% - 9.00%

↓8.00% - 9.50%

↓8.50% - 10.00% I 9.00% - 11.00% I


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Albuquerque 8.00% - 8.50% ↓ 9.00% - 9.50% I 8.50% - 9.00% ↓ 9.50% - 10.00% ↓

9.00% - 10.00% ↓

10.00% - 13.00% ↓

Denver 5.50% - 6.00% ↓

6.50% - 7.00% ↓

6.00% - 6.50% ↓

7.50% - 8.00% ↓

7.50% - 8.00% ↓

9.00% - 9.50% ↓

Las Vegas 7.50% - 8.00% I 8.00% - 9.00% ↓

7.50% - 8.00% I 9.00% - 10.00% ↓ 8.50% - 10.00% ↓ 10.00% - 12.00% ↓Los Angeles 5.00% - 6.00% ↓ 7.50% - 8.00% I 6.25% - 7.25% ↓ 8.50% - 9.00% ↓ 7.50% - 8.50% ↓ 9.50% - 10.00% ↓Orange County 5.50% - 6.00% I 6.75% - 7.25% I 6.25% - 7.25%

↓8.00% - 9.00% I 7.75% - 8.50%

↓9.50% - 10.50% I

Phoenix 6.00% - 6.75% ↓

7.00% - 7.50% I 7.00% - 8.00% I 8.00% - 9.00% I 8.50% - 10.00% ↓ 10.00% - 11.00% IPortland 6.00% - 7.00% I 6.75% - 7.75% I 7.00% - 8.00% I 7.50% - 8.50% I 8.00% - 9.00% I 8.50% - 10.00% ISacramento 6.50% - 7.25% I 7.50% - 8.00% I 7.25% - 8.00% I 8.00% - 9.00% I 8.00% - 9.00% I 9.00% - 10.00% ISalt Lake City 5.50% - 7.00%

↓7.25% - 8.00% I 7.00% - 8.00% I 7.75% - 8.25% I 8.00% - 9.80%

↓9.00% - 10.00% I

San Diego 6.25% - 6.75% I 6.50% - 7.00% I 6.50% - 7.00% I 7.00% - 7.50% I 7.25% - 7.75% ↓

8.25% - 8.75% ↓

San Francisco 3.00% - 4.00% I 6.50% - 7.50% ↓ 4.00% - 5.50% I 7.00% - 8.00% ↓ 6.50% - 7.00% I 8.50% - 9.50% ↓

San Jose 6.50% - 7.50% I

7.00% - 8.00% I

7.00% - 8.00% I

7.50% - 8.50% I

8.00% - 10.00% I

9.00% + I

Seattle 4.75% - 5.50% ↓

5.75% - 6.75% ↓

5.75% - 6.50% ↓

6.75% - 7.75% ↓

7.00% - 8.50% I 8.50% - 10.50% I



AlbuquerqueDenverLas VegasLos AngelesOrange County

Phoenix PortlandSacramentoSalt Lake City San DiegoSan FranciscoSan JoseSeattle

Office CBD | Western Region

Decrease

Remain Flat

Increase


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates



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Baltimore 6.50% - 7.50% ↓ 8.00% - 8.50% ↓

8.00% - 9.00% ↓ 9.00% ↓

N/A N/A N/A N/A Boston 6.00% - 6.50% I 7.00% - 8.00% ↓ 6.75% - 7.75%

↓8.50% - 10.00% ↓ 8.00% - 8.75%

↓9.50% - 11.00%

↓

Charlotte 6.50% - 7.00% ↓

8.50% - 9.00% ↓

7.25% - 8.00% I 9.00% - 9.50% ↓

8.50% - 9.00% I 10.00% IPhiladelphia 6.25% - 7.25%

↓7.50% - 8.50% ↓ 7.50% - 8.50% ↓ 9.00% - 10.00% ↓ 8.50% - 9.50% ↓ 10.00% - 11.00% ↓

Pittsburgh 7.00% - 8.50% ↓

8.50% - 9.00% I 8.75% - 9.25% I 9.50% - 10.00% I 11.00% - 12.00% I 11.00% - 12.00% IRaleigh 6.50% - 7.25% I 7.75% - 8.75% ↓ 7.50% - 8.25%

↓9.00% - 9.50%

↓8.25% - 10.50%

↓9.75% - 11.50%

↓

Washington, D.C. 5.00% - 6.00% ↓

6.50% - 7.50% I 5.50% - 7.50% ↓

7.50% - 8.50% ↓

8.00% - 10.00% I 8.50% - 9.50% ↓

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


BaltimoreBostonCharlottePhiladelphiaPittsburghRaleigh Washington, D.C.



Office Suburban | Eastern Region

Decrease

Remain Flat

Increase



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Office Suburban | Midwestern Region

Decrease

Remain Flat

Increase

* Forecast trends represent the CBRE professionals’ opinion on where ratios are likely to trend in 2nd half of 2014 i n their local market.

FORECAST TRENDS*Class A Class B Class C

StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


Chicago 7.25% - 8.00% I 9.00% - 10.50% ↓

8.00% - 10.00% I 10.00% - 12.00% I 10.25% - 12.00% I 12.00% - 14.00% ICincinnati 8.00% - 8.50% I 9.00% - 10.00% I 9.00% - 9.50%

↓11.00% - 11.50% ↓ 10.00% - 11.00%

↓12.50% - 13.50%

↓

Cleveland 8.75% - 9.00% ↓

10.00% - 11.00% ↓

9.00% - 9.50% ↓

12.00% - 14.00% I 10.00% - 10.50% ↓

13.00% + IColumbus 7.50% - 9.50% I 8.00% - 9.50%

↓8.50% - 10.00%

↓8.50% - 10.50%

↓10.50% - 11.00%

↓11.50% - 12.50% ↓

Detroit 7.00% - 10.00% ↓

9.50% - 12.00% I 9.50% - 11.50% ↓

10.50% - 14.00% I 10.00% - 14.00% I 12.00% - 15.00% IIndianapolis 7.75% - 8.25%

↓8.50% - 9.00%

↓8.00% - 8.50%

↓8.75% - 9.25%

↓9.00% - 9.50%

↓9.50% - 10.00%

↓

Kansas City 7.25% - 7.75% I 7.25% - 7.75% ↓

8.50% - 9.50% ↓ 8.50% - 9.50% ↓

10.00% - 11.00% I 10.00% - 11.00% ↓

Minneapolis 6.75% - 7.50% ↓

8.25% - 9.25% ↓

8.00% - 8.75% ↓

10.50% - 11.50% ↓

10.00% - 11.00% ↓

12.00% - 13.00% ↓

St. Louis 7.00% - 8.00% I 8.00% - 9.50% I 8.00% - 9.00% I 10.00% - 12.00% I 9.00% - 10.00% I 12.00% + I



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Atlanta 6.50% - 7.50% ↓

7.25% - 7.75% ↓

7.50% - 8.50% ↓

8.00% - 9.00% ↓

8.50% - 10.00% I 9.50% - 11.50% ↓ Austin 5.50% - 6.00%

↓6.50% - 7.00%

↓6.50% - 7.00%

↓7.00% - 7.50%

↓8.00% - 8.50% I 8.50% - 9.00%

↓

Dallas 6.25% - 7.25% ↓

7.00% - 8.00% ↓ 6.50% - 7.00% ↓

9.00% - 10.50% ↓ 8.50% - 10.00% I 10.50% - 11.50% ↓Houston 6.00% - 6.50% ↓ 7.50% - 8.00% ↓ 7.75% - 8.25% ↓ 8.50% - 9.50% I 9.00% - 9.50% ↓ 10.00% - 12.00% I Jacksonville 7.50% - 8.50%

↓9.00% - 10.00% I 8.50% - 9.50%

↓10.50% - 12.00% I 9.00% - 10.00%

↓12.00% + I

Memphis 7.50% - 8.00% I 8.25% - 8.75% I 8.50% - 9.50% I 10.00% - 11.00% ↓ 9.00% - 10.00% I 11.00% - 12.00% IMiami 6.00% - 6.75%

↓7.25% - 8.25% ↓ 7.00% - 8.00%

↓7.75% - 9.50%

↓7.50% - 9.00%

↓8.50% - 11.00%

↓

Nashville 6.50% - 7.50% I 7.50% - 8.00% I 8.00% - 8.50% I 9.00% - 9.50% I 9.00% - 10.00% I 10.00% - 10.50% IOrlando 7.00% - 7.50%

↓8.50% - 9.00% I 7.50% - 8.00%

↓8.50% - 9.50%

↓8.50% - 9.50%

↓10.00% - 12.00%

↓

San Antonio 7.50% - 8.00% ↓ 7.50% - 7.75% ↓

8.00% - 8.50% ↓ 8.00% - 8.50% ↓

9.00% - 10.00% ↓ 8.50% - 9.00% ↓

Tampa 7.00% - 8.00% I 7.50% - 8.50% ↓

7.75% - 8.75% ↓

8.25% - 9.50% ↓

9.00% - 11.00% ↓ 9.75% - 11.50% ↓



Office Suburban | Southern Region

Decrease

Remain Flat

Increase


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates





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AlbuquerqueDenverLas VegasLos AngelesOrange County

Phoenix Portland

SacramentoSalt Lake City San DiegoSan FranciscoSan JoseSeattle

Office Suburban | Western Region

Decrease

Remain Flat

Increase


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


Albuquerque 8.00% - 8.50% ↓ 9.00% - 9.50% I 8.50% - 9.00% ↓ 9.50% - 10.00% ↓

9.50% - 11.00% ↓

10.50% - 12.00% ↓

Denver 6.25% - 6.75% ↓

7.00% - 7.50% ↓

6.75% - 7.25% ↓

8.50% - 9.00% ↓

8.75% - 9.25% ↓

10.25% - 10.75% ↓

Las Vegas 7.00% - 7.50% I 7.50% - 8.00% I 7.50% - 8.00% I 7.50% - 8.00% I 8.50% - 10.00% ↓ 10.00% - 12.00% ILos Angeles 5.50% - 7.00% ↓ 7.00% - 8.50% ↓ 6.50% - 7.50% ↓ 8.00% - 9.00% ↓ 7.50% - 8.50% ↓ 9.00% - 10.00% ↓Orange County 5.50% - 6.00% I 6.75% - 7.25% I 6.25% - 7.25%

↓8.00% - 9.00% I 7.75% - 8.50%

↓9.50% - 10.50% I

Phoenix 6.00% - 6.75% ↓

6.50% - 7.50% ↓

7.00% - 8.00% I 7.50% - 9.00% ↓

9.50% - 10.50% I 11.00% - 12.00% IPortland 7.00% - 8.00%

↓7.75% - 8.75% I 7.50% - 8.50%

↓8.50% - 9.50% I 8.50% - 9.50%

↓8.50% - 10.50%

↓

Sacramento 7.00% - 8.00% I 7.75% - 8.75% I 8.00% - 9.00% I 8.75% - 9.75% I 9.00% - 10.00% I 9.75% - 11.00% ISalt Lake City 6.50% - 7.50%

↓7.50% - 8.25% I 7.50% - 8.50% ↓ 8.00% - 8.50% I 8.75% - 9.50% I 9.25% - 10.25% I

San Diego 5.75% - 6.25% I 6.00% - 6.50% I 6.75% - 7.25% ↓ 7.00% - 7.50% ↓ 7.25% - 7.75% I 8.00% - 8.50% ↓San Francisco 5.50% - 6.50% I 5.00% - 6.00%

↓6.50% - 7.50% I 6.00% - 7.00%

↓7.50% - 8.50% I 7.50% - 8.00%

↓

San Jose 5.75% - 6.50% I

7.00% - 8.00% I

6.50% - 7.50% I

7.50% - 8.50% I

8.00% + I

9.00% + I

Seattle 5.75% - 6.50% ↓

7.00% - 8.00% ↓

6.50% - 7.25% ↓

8.00% - 9.00% ↓

7.25% - 8.25% I 8.50% - 10.00% ↓


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>Multifamily | Overview

CLICK TO DOWNLOAD

Select from the list below to access the current multifamily key ratios, forecasts and maps.

INFILL/URBAN

Complete Multifamily Infill/Urban Current Key Ratios Chart (PDF)

Complete Multifamily Infill/Urban Current Forecast Chart (PDF)Complete Multifamily Infill/Urban Current Key Ratios Map (PDF)

Among all sectors of commercial real estate investment, multifamily saw the earliest turnaround in investor interest, as the positive trendsin income fundamentals seen over the past few years had been widely expected. The stabilizing inuence of the debt providedby the government-sponsored enterprises (Freddie Mac and Fannie Mae) was an enormous boost to market liquidity as well.Multifamily transaction volume for the 12 months ended June 30, 2014 totaled $98.4 billion, according to RCA. This gure is downfrom the total volume of a year earlier which totaled $106.8 billion. Multifamily pricing has become expensive and while fundamentalsremain strong, with growing rents and still record-low vacancy rates, investor demand has shifted somewhat.

Multifamily cap rates show little change in this edition of the cap rate survey. The greatest change was in Class C suburban multifamily,where the average cap rate contracted by 14 bps to 6.75%. CBRE Capital Markets and Valuation professionals expect thatof the 42 multifamily markets surveyed, only 12 will experience further compression in cap rates for Class A stabilized assets in inlllocations over the next six months. With the exception of San Diego, the markets where further compression is expected are secondaryand tertiary markets. CBRE does not expect further compression in all secondary and tertiary markets. The expectation is that cap rates for

Class A stabilized assets will be at in most secondary and tertiary markets with selected markets such as Indianapolis,Kansas City, Minneapolis, St. Louis, Memphis, and Nashville seeing compression of less than 25 bps.

SUBURBAN

Complete Multifamily Suburban Current Key Ratios Chart (PDF)

Complete Multifamily Suburban Current Forecast Chart (PDF)Complete Multifamily Suburban Current Key Ratios Map (PDF)

http://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHInfill_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHInfill_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_MultifamilyInfill_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHSuburban_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHSuburban_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_MultifamilySuburban_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_MultifamilySuburban_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_MultifamilyInfill_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHSuburban_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHInfill_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHSuburban_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_MHInfill_KeyRatios.pdf


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Baltimore 4.25% - 5.00% ↓ 4.75% - 5.50% I 5.00% - 6.00% ↓

5.50% - 6.50% ↓

6.00% - 7.00% ↓

6.75% - 7.50% ↓Boston 4.00% - 4.50% I 4.75% - 5.25% I 4.50% - 5.00% I 5.50% - 6.00% I N/A N/A 5.75% - 6.25% ICharlotte 4.75% - 5.00%

↓5.00% - 5.25%

↓5.25% - 5.75%

↓5.25% - 5.75%

↓6.25% - 6.75%

↓6.25% - 6.75%

↓

New York 4.00% - 4.50% ↓

5.00% - 5.50% I 4.50% - 5.00% I 5.50% - 6.00% I 5.00% - 6.00% I 6.50% - 7.00% ↓Philadelphia 5.00% - 5.25% I 6.50% - 7.00% ↓ 5.50% - 6.00%

↓7.00% - 7.50% I 6.50% - 7.00%

↓7.50% - 8.00% I

Pittsburgh 6.00% - 6.50% I 6.50% - 7.00% I 6.50% - 7.00% I 7.00% - 7.50% I 7.50% - 8.00% ↓

8.50% - 9.00% IRaleigh 4.75% - 5.00% ↓ 5.00% - 5.25%

↓5.25% - 5.75% I 5.25% - 5.75% N/A 6.25% - 6.75% I 6.25% - 6.75% N/A

Washington, D.C. 4.25% - 4.75% I 4.75% - 5.25% ↓ 5.00% - 5.50% ↓

5.50% - 6.50% I 6.25% - 7.00% ↓

6.75% - 7.50% ↓



FORECAST TRENDS*

Class A Class B Class CStabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


BaltimoreBostonCharlotteNew York PhiladelphiaPittsburghRaleigh Washington, D.C.

Multifamily Infill/Urban | Eastern Region

Decrease

Remain Flat

Increase



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Chicago 4.50% - 4.75% ↓ 4.50% - 4.75% ↓

5.00% - 5.25% ↓ 5.00% - 5.25% ↓

5.25% - 5.50% ↓

5.00% - 5.25% ↓

Cincinnati 5.00% - 5.50% ↓

6.00% - 6.50% I 6.00% - 6.25% ↓

7.00% - 7.50% I 7.00% - 7.50% ↓

8.00% - 8.50% ICleveland 6.50% - 7.50% ↓ N/A N/A 7.00% - 8.00%

↓N/A N/A 8.00% - 10.00% N/A N/A N/A

Columbus 5.75% - 6.25% I 6.00% - 6.50% I 6.75% - 7.25% I 7.00% - 7.50% I 7.50% - 9.00% I 8.75% - 9.25% IDetroit 7.50% - 8.00% ↓ 7.75% - 8.25% I 8.00% - 9.00% ↓ 8.25% - 8.75% I 9.00% - 11.00% ↓ 10.00% - 10.50% IIndianapolis 5.75% - 6.25% I 6.00% - 6.50%

↓6.75% - 7.25% I 7.00% - 7.50%

↓8.00% - 8.50% ↓ 8.50% - 9.00%

↓

Kansas City 5.25% - 5.75% ↓ 5.75% - 6.25% N/A 5.75% - 6.25% ↓

6.50% - 7.00% N/A 6.75% - 7.25% ↓

7.50% - 8.00% N/A Minneapolis 4.50% - 4.75%

↓4.75% - 5.25%

↓5.25% - 5.50% ↓ 5.25% - 5.75% I 5.75% - 6.25% I 6.25% - 6.75%

↓

St. Louis 5.50% - 6.25% I N/A N/A 6.50% - 7.25% I N/A N/A 7.75% - 9.25% I N/A N/A


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13



Multifamily Infill/Urban | Midwestern Region

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


Decrease

Remain Flat

Increase


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StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

Atlanta AustinDallasHouston JacksonvilleMemphis

MiamiNashvilleOklahoma City OrlandoSan AntonioTampa

Atlanta 4.25% - 4.75% I 5.75% - 6.25% ↓ 5.00% - 5.50% I 6.00% - 6.50% ↓ 6.00% - 6.50% ↓

7.00% - 7.50% ↓ Austin 4.25% - 4.75% I 4.50% - 5.25% I 4.75% - 5.25% I 5.00% - 5.75% I 5.00% - 5.50% I 5.00% - 5.75% IDallas 4.25% - 4.75% I 4.50% - 5.00% I 5.50% - 6.00%

↓5.50% - 6.00%

↓5.75% - 6.25%

↓6.25% - 6.75% I

Houston 4.50% - 5.00% I 4.75% - 5.25% I 5.50% - 6.00% I 5.75% - 6.25% I 6.00% - 6.50% I 6.25% - 6.75% I Jacksonville 4.25% - 5.25% I 5.75% - 6.25% I 5.00% - 5.50% I 6.00% - 6.50% I 6.25% - 6.75%

↓6.50% - 7.00%

↓

Memphis 5.50% - 6.00% ↓

5.75% - 6.25% ↓ 6.00% - 7.50% ↓ 6.25% - 7.00% ↓ 8.00% + I 8.00% + ↓Miami 4.00% - 5.25%

↓4.50% - 5.75% I 4.25% - 6.00%

↓5.00% - 6.50% ↓ 5.00% - 7.50%

↓6.50% - 8.00%

↓

Nashville 5.00% - 5.50% I 5.75% - 6.25% I 6.00% - 6.50% I 6.50% - 7.00% I 7.00% - 7.50% I 7.25% - 7.75% IOklahoma City 5.50% - 6.00%

↓7.50% - 8.00% N/A 6.00% - 6.50%

↓N/A N/A 7.25% - 7.75%

↓N/A N/A

Orlando 4.75% - 5.50% ↓ 5.00% - 6.50% ↓ 5.25% - 6.25% I 5.50% - 7.25% ↓ 5.75% - 7.00% ↓

6.25% - 8.25% ↓

San Antonio 5.25% - 5.75% ↓

N/A N/A 5.75% - 6.25% ↓

6.00% - 6.50% ↓

6.25% - 6.75% ↓

6.50% - 7.00% ↓

Tampa 4.50% - 5.00% I 5.00% - 5.50% I 5.25% - 5.75% I 5.50% - 6.00% ↓

6.50% - 7.00% I 7.00% - 7.50% I

Multifamily Infill/Urban | Southern Region

Decrease

Remain Flat

Increase

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates




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Albuquerque 5.75% - 6.00% ↓

7.00% - 8.00% N/A 6.00% - 6.50% I 8.00% - 9.00% ↓ 6.75% - 7.50% ↓ 9.50% - 10.00% ↓Denver 4.50% - 5.00%

↓5.00% - 5.50%

↓5.00% - 5.50%

↓5.75% - 6.25% I 5.75% - 6.25%

↓6.50% - 7.00% I

Inland Empire 4.75% - 5.25% I 5.00% - 5.50% I 5.00% - 5.50% I 5.50% - 6.00% ↓

6.00% - 6.50% ↓ 6.50% - 7.00% ILos Angeles 4.00% - 4.50% ↓ 4.25% - 4.75% ↓ 4.25% - 4.75% ↓ 4.75% - 5.50% ↓ 4.75% - 5.75% ↓ 5.50% - 6.50% ↓Orange County 3.75% - 4.25%

↓4.75% - 5.25% ↓ 4.50% - 5.00% ↓ 5.75% - 6.25% ↓ 4.75% - 5.25% ↓ 6.25% - 6.75% ↓

Phoenix 4.75% - 5.00% I 5.25% I 5.25% - 5.75% I 5.50% - 6.00% I 6.00% - 6.50% I 6.25% - 6.75% IPortland 4.00% - 4.50%

↓4.00% - 4.50%

↓4.50% - 5.00% I 4.50% - 4.75%

↓5.00% - 5.50% I 4.75% - 5.25%

↓

Sacramento 4.50% - 5.00% ↓ 4.75% - 5.25% I 5.25% - 5.75% I 5.50% - 6.00% I 5.75% - 6.25% I 6.00% - 6.50% ↓

Salt Lake City 5.50% - 6.00% ↓ 5.75% - 6.25% I 5.75% - 6.25% I 6.00% - 6.50% I 6.00% - 7.00% I 6.25% - 7.00% ISan Diego 4.00% - 4.25% I 4.00% - 4.50%

↓4.50% - 5.00% I 5.25% - 5.75% ↓ 5.00% - 5.50%

↓5.25% - 5.75%

↓

San Francisco Bay Area 3.50% - 4.00% I N/A N/A 3.75% - 4.00% ↓

3.75% - 4.25% ↓

4.00% - 4.50% I 3.75% - 4.25% ↓

San Jose 3.75% - 4.25% N/A N/A N/A 4.00% - 4.50% N/A 4.00% - 4.50% N/A 4.50% - 5.00% N/A 4.25% - 4.75% N/A Seattle 4.00% - 4.50% I 4.50% - 5.00% I 4.75% - 5.25% I 5.00% - 5.50% I 5.50% - 6.00% I 5.25% - 6.25%

↓


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

AlbuquerqueDenverInland EmpireLos AngelesOrange County

Phoenix PortlandSacramentoSalt Lake City San DiegoSan Francisco Bay AreaSan JoseSeattle

Multifamily Infill/Urban | Western Region

Decrease

Remain Flat

Increase

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates




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Chicago 5.25% - 5.50% ↓

5.50% - 5.75% ↓

5.75% - 6.25% I 5.75% - 6.25% ↓

6.50% - 7.00% ↓

6.50% - 7.00% ↓

Cincinnati 5.50% - 6.00% I 6.50% - 7.00% I 6.50% - 7.00% I 7.00% - 7.50% ↓

8.00% - 8.50% I 8.50% - 9.00% ICleveland 6.75% - 7.00% ↓ 7.75% - 8.00% N/A 7.00% - 7.25%

↓8.00% - 8.50% N/A 7.50% - 8.00%

↓9.00% - 9.50% N/A

Columbus 6.00% - 6.50% I 6.25% - 6.75% I 7.00% - 7.50% I 7.25% - 7.75% I 8.00% - 9.00% I 8.75% - 9.25% IDetroit 6.75% - 7.50%

↓7.75% - 8.25% I 7.50% - 8.50% I 8.25% - 8.75% I 8.50% - 10.00%

↓10.00% - 10.50% I

Indianapolis 6.00% - 6.50% I 6.50% - 7.00% ↓

7.00% - 7.50% I 7.50% - 8.00% ↓

8.00% - 8.50% I 8.50% - 9.00% ↓

Kansas City 5.50% - 6.00% I 6.00% - 6.50% ↓

6.00% - 6.50% I 6.75% - 7.25% ↓

7.00% - 7.50% ↓

7.50% - 8.00% ↓

Minneapolis 5.00% - 5.25% ↓

5.50% - 5.75% ↓

5.50% - 6.00% ↓

6.00% - 6.50% I 6.25% - 6.75% ↓

7.25% - 7.75% ↓St. Louis 5.50% - 6.25% I N/A N/A 6.50% - 7.25% I N/A N/A 7.75% - 9.25% I N/A N/A


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

Multifamily Suburban | Midwestern Region

Decrease

Remain Flat

Increase

FORECAST TRENDS*Class A Class B Class C

StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates





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Atlanta 5.00% - 5.50% I 6.00% - 6.50% I 5.50% - 6.00% I 6.75% - 7.25% ↓ 6.50% - 7.00% I 7.50% - 8.00% ↓ Austin 5.00% - 5.50% I 5.25% - 5.75% I 5.50% - 6.00%

↓5.75% - 6.25%

↓6.00% - 6.50%

↓6.25% - 6.75%

↓

Dallas 5.25% - 5.75% I 5.25% - 5.75% ↓

5.50% - 6.00% ↓

5.50% - 6.00% ↓

7.25% - 7.75% I 7.25% - 7.75% ↓

Houston 5.50% - 6.00% I 5.75% - 6.25% ↓

6.25% - 6.75% I

6.25% - 6.75% ↓

7.25% - 7.75% I 6.75% - 7.25% ↓

Jacksonville 4.75% - 5.50% ↓

6.00% - 6.50% I 5.00% - 6.50% ↓

6.50% - 7.00% N/A 6.00% - 7.50% ↓

7.00% - 7.50% N/A Memphis 5.50% - 6.00%

↓5.75% - 6.25%

↓6.00% - 7.50%

↓6.25% - 7.00%

↓8.00% + I 8.00% +

↓

Miami 4.50% - 5.25% I 5.00% - 5.75% ↓ 5.00% - 6.00% ↓ 5.25% - 6.50% ↓ 6.00% - 7.50% ↓

6.00% - 8.00% ↓

Nashville 5.50% - 6.00% I 5.75% - 6.25% I 6.00% - 6.50% I 6.50% - 7.00% I 7.00% - 7.50% I 7.50% - 8.00% IOklahoma City 5.75% - 6.25%

↓8.00% - 8.50% N/A 6.00% - 6.50%

↓9.00% - 9.50% N/A 7.75% - 8.00%

↓N/A N/A

Orlando 4.75% - 5.50% ↓ 5.00% - 6.75% ↓ 5.50% - 6.50% I 5.75% - 7.50% ↓ 6.25% - 7.25% ↓

6.50% - 8.25% ↓

San Antonio 5.25% - 5.75% ↓

5.50% - 6.00% ↓

5.75% - 6.25% ↓

6.00% - 6.50% ↓

6.25% - 7.00% ↓

6.50% - 7.25% ↓

Tampa 4.75% - 5.25% ↓

5.25% - 5.75% I 5.50% - 6.00% ↓

6.00% - 6.50% I 7.00% - 7.50% I 7.50% - 8.00% ↓


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

Atlanta AustinDallasHouston JacksonvilleMemphis

MiamiNashvilleOklahoma City OrlandoSan AntonioTampa

Multifamily Suburban | Southern Region

Decrease

Remain Flat

Increase

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates




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Albuquerque 5.75% - 6.25% I 7.00% - 8.25% ↓ 6.00% - 7.00% ↓

7.75% - 9.00% ↓ 7.00% - 7.75% ↓ 8.25% - 10.00% ↓Denver 5.00% - 5.25%

↓5.50% - 6.00% I 5.25% - 5.75%

↓6.25% - 6.75% ↓ 6.00% - 6.50% I 6.75% - 7.25%

↓

Inland Empire 4.75% - 5.25% I 5.25% - 5.75% I 5.00% - 5.50% I 5.50% - 6.00% ↓

6.00% - 6.50% ↓ 6.50% - 7.00% ↓

Las Vegas 5.00% - 5.50% I 5.50% - 6.00% I 5.50% - 6.50% ↓ 6.00% - 7.00% ↓ 6.00% - 7.50% ↓

6.50% - 8.00% ↓

Los Angeles 4.50% - 5.00% ↓

5.00% - 6.00% ↓ 4.75% - 5.25% I 5.25% - 5.75% ↓

5.50% - 6.00% I 5.75% - 6.75% ↓

Orange County 4.25% - 4.75% ↓ 4.75% - 5.25% ↓

4.75% - 5.25% I 5.75% - 6.25% ↓ 5.00% - 5.50% ↓

6.00% - 6.50% ↓

Phoenix 5.00% - 5.50% I 5.50% - 6.00% I 5.00% - 5.50% I 5.75% - 6.25% I 6.00% - 6.50% I 6.50% - 7.00% IPortland 5.00% - 5.50% I 4.75% - 5.25%

↓5.50% - 6.00% I 5.25% - 5.75%

↓5.75% - 6.00% I 5.75% - 6.25%

↓

Sacramento 5.00% - 5.50% I 5.50% - 6.00% I 5.25% - 5.75% ↓

5.75% - 6.25% ↓

6.25% - 6.75% ↓ 6.50% - 7.00% ISalt Lake City 5.50% - 6.00% ↓ 5.75% - 6.25% I 5.75% - 6.25% I 6.00% - 6.50% I 6.00% - 7.00% I 6.25% - 7.00% ISan Diego 4.25% - 4.75%

↓4.25% - 4.75%

↓4.75% - 5.25% I 5.50% - 6.00% I 5.00% - 5.50%

↓5.50% - 6.00%

↓

San Francisco Bay Area 4.00% I N/A N/A 4.25% ↓

4.00% - 4.50% ↓

5.00% - 5.50% ↓ 4.00% - 4.50% ↓

San Jose 4.00% - 4.50% N/A N/A N/A 4.50% - 5.00% N/A 4.25% - 4.75% N/A 4.75% - 5.25% N/A 4.25% - 4.75% N/A Seattle 4.50% - 5.25% I 4.75% - 5.25% I 5.00% - 5.50% I 5.25% - 5.75% I 6.00% - 6.50% I 6.00% - 6.50% I


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

AlbuquerqueDenverInland EmpireLas Vegas

Los AngelesOrange County Phoenix PortlandSacramentoSalt Lake City San DiegoSan Francisco Bay AreaSan JoseSeattle

Multifamily Suburban | Western Region

Decrease

Remain Flat

Increase

* Forecast trends represent the CBRE professionals’ opinion on where ratios are likely to trend in 2nd half of 2014 in their local market.

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates



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The retail sector continues to see increases in sales volume, despite lagging other property sectors into the early stages of the recovery.For the 12 months through mid-year 2014, sales volume reached $76 billion, up from the $54.1 billion pace set duringthe previous 12 months. This 40.6% increase for retail overall is generally reected in the trends seen among retail subtypes—sales volumefor strip-center retail was up 37.8% from a year earlier, hitting $31.7 billion in the 12 months through mid-year 2014, while the mall segmentsaw volume of $44.3 billion during the same period, up 42.6% from a year earlier.

Our survey results show that high street retail cap rates contracted by 36 bps and Class A neighborhood center cap rates declined by32 bps. Power centers also registered meaningful declines in cap rates of approximately 30 bps. Class B neighborhood center cap rateswere little changed while Class C neighborhood center cap rates increased by 29 bps, pointing to greater dispersion of the perceptionsof risk across the retail sector classes and locations.

For Class A stabilized neighborhood center assets, CBRE professionals expect that over the next six months cap rates will remain at

or increase in 27 of the 40 markets surveyed, slightly decrease in 10 markets, and decrease more signicantly in four. The same basic patternsare seen in the power center subtypes going forward. As one moves up the risk spectrum to lower-grade assets, cap rate compressionis expected to dwindle in virtually all markets.

CLICK TO DOWNLOAD

Select from the list below to access the current retail key ratios, forecasts and maps.

NEIGHBORHOOD/COMMUNITY CENTER

Complete Retail Neighborhood/Community Center (Grocery Anchored) Current Key Ratios Chart (PDF)

Complete Retail Neighborhood/Community Center (Grocery Anchored) Current Forecast Chart (PDF)

Complete Retail Neighborhood/Community Center (Grocery Anchored) Current Key Ratios Map (PDF)

POWER CENTER

Complete Retail Power Center Current Key Ratios Chart (PDF)

Complete Retail Power Center Current Forecast Chart (PDF)

Complete Retail Power Center Current Key Ratios Map (PDF)

HIGH STREET

Complete High Street Retail Current Key Ratios and Forecast Charts (PDF)

Complete High Street Retail Current Key Ratios Map (PDF)

Retail | Overview

http://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailNeighborhoodCommunityCenter_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailNeighborhoodCommunityCenter_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_RetailNeighborhood_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailPowerCenter_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailPowerCenter_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_RetailPowerCenterandHighStreet_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_HighStreetRetail.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_RetailPowerCenterandHighStreet_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_RetailPowerCenterandHighStreet_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_HighStreetRetail.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_RetailPowerCenterandHighStreet_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_RetailNeighborhood_KeyRatiosMap.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailPowerCenter_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailNeighborhoodCommunityCenter_ForecastTrends.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailPowerCenter_KeyRatios.pdfhttp://marketing.cbre.com/IGMC/CapRates_FirstHalf2014/1H2014_CapRateSurvey_RetailNeighborhoodCommunityCenter_KeyRatios.pdf


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Baltimore 5.50% - 7.00% ↓ 7.00% - 8.50% ↓ 6.50% - 8.00% ↓ 8.00% - 9.50% ↓ 7.75% - 9.50% ↓

9.50% - 10.00% ↓Boston 5.00% - 6.00%

I

5.50% - 6.50% I 6.25% - 7.50% ↓

7.25% - 8.50% ↓

7.75% - 9.00% ↓

8.75% + N/A Charlotte 5.75% - 6.50%

↓7.00% - 7.75%

↓6.75% - 7.50%

↓7.75% - 8.50%

↓8.00% - 10.00% I 9.00% - 10.00%

↓

Philadelphia 5.75% - 6.75% ↓

7.25% - 8.00% ↓

6.75% - 7.50% ↓

8.50% - 9.00% ↓

7.50% - 8.50% ↓

9.50% - 11.00% ↓

Pittsburgh 6.50% - 7.25% ↓

8.00% - 8.50% I 6.75% - 7.75% ↓

9.00% - 10.00% I 9.50% - 10.50% I 11.00% - 12.00% IRaleigh 5.75% - 6.50%

↓7.00% - 7.75%

↓6.75% - 7.50%

↓7.75% - 8.50%

↓8.00% - 10.00%

↓9.00% - 10.00%

↓

Washington, D.C. 5.00% - 6.00% ↓

6.50% - 7.50% ↓

6.00% - 7.00% ↓ 7.50% - 8.50% ↓

7.00% - 7.50% ↓ 8.50% - 10.00% ↓


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


BaltimoreBostonCharlottePhiladelphiaPittsburghRaleigh Washington, DC


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

Retail Neighborhood/Community Center (Grocery Anchored) | Eastern Region

Decrease

Remain Flat

Increase


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Chicago 5.50% - 6.00% ↓

6.50% - 7.00% I 6.75% - 7.25% I 7.25% - 7.75% I

7.75% - 8.25% I 8.25% - 8.75% I

Cincinnati 6.00% - 6.50% I

6.75% - 7.25% I 7.00% - 7.50% I 7.50% - 8.00% I

8.00% - 8.50% I

8.50% - 9.00% ICleveland 6.25% - 6.75%

I

7.00% - 7.50% I 7.25% - 7.75% I

7.75% - 8.25% I 8.25% - 8.75% I

8.75% - 9.25% IColumbus 6.25% - 6.75%

I

7.00% - 7.50% I 7.00% - 7.50% I 7.50% - 8.00% I 8.00% - 8.50% I 8.50% - 9.00% IDetroit 7.00% - 8.00%

I

8.00% - 9.00% I 8.00% - 9.50% I 9.00% - 10.00% I 9.50% - 11.00% I 10.00% - 12.00% IIndianapolis 6.00% - 6.50%

I

6.75% - 7.25% I 7.00% - 7.50% I 7.50% - 8.00% I

8.00% - 8.50% I 8.50% - 9.00% IKansas City 6.00% - 6.50%

I

6.75% - 7.25% I 7.00% - 7.50% I 7.50% - 8.00% I

8.00% - 8.50% I 8.50% - 9.00% IMinneapolis 5.75% - 6.25%

I

6.50% - 7.00% I 6.75% - 7.25% I

7.25% - 7.75% I 7.75% - 8.25% I

8.25% - 8.75% I

St. Louis 6.00% - 6.50% ↓

6.75% - 7.25% I 7.00% - 7.75% I 7.75% - 8.50% I 8.00% - 8.50% ↓

9.25% - 10.50% I


Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13



FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


Retail Neighborhood/Community Center (Grocery Anchored) | Midwestern Region

Decrease

Remain Flat

Increase

C S


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Atlanta 5.50% - 6.50% ↓

6.00% - 7.00% ↓

6.50% - 7.50% ↓

7.00% - 8.00% ↓

7.50% - 10.00% ↓ 8.00% - 10.00% ↓ Austin 5.00% - 5.50% I 5.50% - 6.00%

↓7.00% - 7.75% ↓ 7.50% - 8.25%

↓9.25% - 9.75% ↓ 9.75% - 10.25% I

Dallas 5.25% - 6.25% ↓ 5.75% - 6.75% ↓

7.00% - 8.25% ↓ 7.50% - 8.75% ↓ 9.00% + ↓ 9.50% + ↓

Houston 5.00% - 6.25% ↓

5.50% - 6.75% ↓

7.00% - 8.25% ↓

7.50% - 8.75 ↓

9.25% + ↓ 9.75% + ↓

Jacksonville 5.75% - 6.25% ↓

6.50% - 7.00% I 6.75% - 7.25% ↓

7.00% - 8.00% I 8.00% + ↓

9.00% + ↓

Memphis 7.00% - 7.50% I 8.00% - 8.50% I 7.50% - 8.00% I 8.50% - 9.00% I 9.50% - 10.50% ↓

10.50% - 11.50% ↓

Miami 5.50% - 6.00% ↓

6.50% - 7.00% I 6.00% - 6.75% ↓

7.00% - 8.00% I 7.50% - 9.00% I 8.00% - 9.00% INashville 7.00% - 7.50% I 8.00% - 8.50% I 8.00% - 8.50% I 9.00% - 9.50% I 9.00% - 9.50% I 10.00% - 10.50% IOrlando 5.75% - 6.25%

↓6.50% - 7.00%

↓6.50% - 7.00%

↓7.00% - 8.00%

↓8.00% +

↓9.00% +

↓

San Antonio 5.50% - 6.75% ↓ 6.00% - 7.25% ↓

7.25% - 8.50% ↓ 7.75% - 9.00% ↓

9.50% + I 10.00% + ↓

Tampa 5.75% - 6.25% ↓

7.00% - 8.00% ↓

6.50% - 7.00% ↓

7.00% - 8.00% ↓

8.00% + ↓

9.00% + ↓


StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13

StabilizedCap Rates

Comparedto 2H13


Comparedto 2H13



Retail Neighborhood/Community Center (Grocery Anchored) | Southern Region

Decrease

Remain Flat

Increase


FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates


C R S


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Albuquerque 6.75% - 7.50% ↓

7.75% - 8.50% ↓

7.50% - 8.75% ↓

8.50% - 9.50% I 8.75% - 9.50% ↓

9.00% - 10.00% ↓

Denver 5.50% - 6.00% ↓

6.25% - 7.25% ↓

6.75% - 7.25% I

7.25% - 7.75% ↓

8.50% - 9.00% ↓ 9.00% - 9.50% ↓

Las Vegas 6.75% - 7.25% ↓

8.00% - 9.00% I 7.25% - 8.00% ↓

9.00% - 10.00% I 8.00% - 9.00% I 10.00% - 12.00% ILos Angeles 4.75% - 5.75%

↓7.00% - 7.50% I 6.25% - 7.25%

↓7.50% - 8.00% I 8.50% - 10.00% ↓ 9.00% + ↓

Orange County 4.75% - 5.75% ↓

7.00% - 7.50% I 6.25% - 7.25% ↓

7.50% - 8.00% I 8.50% - 10.00% ↓ 9.00% + ↓Phoenix 5.25% - 6.25%

↓7.00% - 7.50% I 6.25% - 7.25% ↓ 7.50% - 8.00%

↓8.50% - 10.00% ↓ 9.00% +

↓

Portland 5.25% - 6.25% ↓

7.50% - 8.00% ↓ 6.50% - 7.50% I 8.00% - 8.50% ↓

9.00% - 10.50% ↓ 9.00% - 11.00% ↓

Sacramento 5.75% - 6.50% ↓

7.00% - 8.00% I 7.00% - 8.00% I 8.00% - 9.00% I 8.00% - 10.00% ↓ 9.00% - 11.00% ISalt Lake City 5.25% - 6.25%

↓7.00% - 7.50%

↓6.25% - 7.25%

↓7.50% - 8.00%

↓8.50% - 10.00% ↓ 9.00% + ↓

San Diego 4.75% - 5.75% ↓

7.00% - 7.50% I 6.25% - 7.25% ↓

7.50% - 8.00% I 8.50% - 10.00% ↓ 9.00% + ↓San Francisco 4.75% - 5.75%

↓7.00% - 7.50% ↓ 6.25% - 7.25% ↓ 7.50% - 8.00% ↓ 8.50% - 10.00% ↓ 9.00% + ↓

San Jose 4.75% - 5.75% ↓

7.00% - 7.50% ↓ 6.25% - 7.25% ↓ 7.50% - 8.00% ↓ 8.50% - 10.00% ↓ 9.00% + ↓

Seattle 5.00% - 5.75% I

6.50% - 7.50% ↓ 6.00% - 6.75% I

7.00% - 8.00% ↓

6.75% - 7.25% ↓

7.50% - 8.50% ↓

AlbuquerqueDenverLas VegasLos AngelesOrange County Phoenix

PortlandSacramentoSalt Lake City San DiegoSan FranciscoSan JoseSeattle


Retail Neighborhood/Community Center (Grocery Anchored) | Western Region

Decrease

Remain Flat

Increase

FORECAST TRENDS*


StabilizedCap Rates


StabilizedCap Rates


StabilizedCap Rates



Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

C R t S


31/49

IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


31

>


Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13Baltimore 6.50% - 7.50% ↓ 8.00% - 9.00% ↓ 7.00% - 8.50% ↓ 9.00% - 10.00% ↓ 8.50% - 9.50%

↓10.00% - 12.00%

↓

Boston 6.25% - 6.75% ↓ 6.50% - 7.00% ↓

6.75% - 7.50% ↓

7.00% - 7.50% ↓

7.75% - 9.00% ↓

8.75% + ↓

Charlotte 6.50% - 7.00% ↓

7.50% - 8.25% ↓

7.25% - 7.75% ↓

8.25% - 8.75% ↓

7.75% - 8.00% ↓

9.00% - 11.00% ↓Philadelphia 6.00% - 6.75%

↓7.75% - 8.50%

↓6.75% - 7.50%

↓9.00% - 9.50%

↓7.50% - 8.50%

↓10.00% - 11.50%

↓

Pittsburgh 6.50% - 7.25% ↓

8.00% - 8.50% ↓

7.50% - 8.25% ↓

9.00% - 10.00% ↓

11.00% - 12.00% I 12.00% - 13.00% IRaleigh 6.50% - 7.00% ↓ 7.50% - 8.25%

↓7.25% - 7.75%

↓8.25% - 8.75%

↓7.75% - 8.50%

↓9.00% - 11.00%

↓

Washington, D.C. 5.75% - 6.50% ↓

7.50% - 8.50% ↓ 6.50% - 7.25% ↓ 8.50% -10.00% ↓ 7.25% - 8.00% ↓ 10.00% - 11.00% ↓


StabilizedCap Rates Return on Costfor Value-Add StabilizedCap Rates Return on Costfor Value-Add StabilizedCap Rates Return on Costfor Value-AddBaltimoreBostonCharlottePhiladelphiaPittsburghRaleigh Washington, DC

Retail Power Center | Eastern Region

Decrease

Remain Flat

Increase


C R t S


32/49

IN THIS ISSUE:

Overview

Office

Multifamily

Retail

Industrial

Hotels

Appendix


32

>

Chicago 6.25% - 6.75% I 7.00% - 7.50% I 7.00% - 7.50% I 7.75% - 8.25% I 7.75% - 8.25% I 8.50% - 9.00% ICincinnati 6.50% - 7.00%

I

7.25% - 7.75% I 7.25% - 7.75% I

8.00% - 8.50% I 8.00% - 8.50% I

8.75% - 9.25% ICleveland 6.75% - 7.25%

I

7.50% - 8.00% I 7.50% - 8.00% I

8.25% - 8.75% I 8.25% - 8.75% I 9.00% - 9.50% I

Columbus 6.75% - 7.25% I 7.50% - 8.00% I 7.25% - 7.75% I 8.00% - 8.50% I 8.00% - 8.50% I 8.75% - 9.25% IDetroit 7.00% - 8.00% I 8.00% - 9.00%

I

8.00% - 9.50% I 9.00%-10.00% I 9.50% -11.00% I 10.00% - 12.00% IIndianapolis 6.50% - 7.00% I 7.25% - 7.75% I 7.25% - 7.75% I 8.00% - 8.50% I 8.00% - 8.50% I 8.75% - 9.25% IKansas City 6.50% - 7.00% I 7.25% - 7.75% I 7.25% - 7.75% I 8.00% - 8.50% I 8.00% - 8.50% I 8.75% - 9.25% IMinneapolis 6.25% - 6.75% I 7.00% - 7.50% I 7.00% - 7.50% I 7.75% - 8.25% I 7.75% - 8.25% I 8.50% - 9.00% ISt. Louis 6.25% - 7.00%

I

7.25% - 7.75% ↓ 7.00% - 7.50% ↓

8.00% - 8.75% I 8.50% - 9.25% I 8.75% - 9.25% ↓


Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Compared

to 2H13

Stabilized

Cap Rates

Compared

to 2H13

Return on Cost

for Value-Add

Com

cbre north america caprate 2014h1 master

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