Cap Rate Survey Feb 2013.pdf

Embed Size (px)

Text of Cap Rate Survey Feb 2013.pdf

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    1/38

    CBRE CAP RATE SURVEY

    Click to Enter

    A CBRE PublicationFebruary 2013

    In This Issue:

    Overview pg 2

    Office pg 5

    Multihousing pg 12

    Retail pg 19

    Industrial pg 27

    Hotels pg 31

    Appendix pg 34

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    2/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    2

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    2012 was a stand-out year for U.S. commercial real estate investment. Investors expanded their activity in the sector due to the stable yields

    offered amid an environment where low and unstable returns in other asset classes prevailed. Figures from Real Capital Analytics (RCA) showthat transaction activity in 2012 returned to the average pace set in 2004 and 2005. The combination of individual property sales, portfolio plays

    and entity-level transactions in the main commercial property sectors hit $261.7 billion for the year. This level represents a 35% increase from

    year-end 2011.

    Among the major property sectors, multihousing is the clear leader in terms of increases in sales volume over the last year. Transaction activity

    totaled $84.6 billion, up 47% from year-end 2011. The same-store price index from RCA, the Commercial Property Price Index (CPPI), shows a

    9.6% gain in asset values over the year. The retail and office sectors came in at a distant second to the multihousing sector in terms of increases in

    transaction volume in 2012, with growth of 19.7% and 19.4%, respectively. In reality, these are both significant growth trends, and only look smallby comparison to the tremendous growth in the multihousing sector. With a 6.1% increase according to the CPPI, the office sectors growth in sales

    prices achieved outpaced that of the retail sector, which recorded only a 1.2% increase.

    The industrial sector came in at the bottom on total sales volume with only 4.2% growth seen over year-end 2011. The headline figures, though,

    are distorted by a major entity-level transaction in 2011 with the AMB/Prologis merger. For sales of individual assets, growth reached 29.3%, to

    reach $25.7 billion in transactions for the year. Portfolio deals grew even faster, at a pace of 34.9%, totaling $10.3 billion in transaction value.

    Clearly, there was investor interest in the industrial sector as well.

    Looking at some of the major property subtypes, there are signs of a tentative move towards taking on risk. CBD office assets are perceived tobe less risky by investors, given the notion that there is more durable exit pricing and exit liquidity. This has significantly increased the appetite of

    investors for these types of assets in the past couple of years, with deals in CBD submarkets accounting for nearly 54% of all office transactions in

    2010 and 2011. This figure may not sound large, but the data from our local research teams suggest that CBD submarkets represent only about

    36% of all competitive office inventory in the U.S.

    Another example of a move to get exposure to risk assets can be seen among some cap rate spreads for different subtypes in the retail sector of

    commercial properties. Our year-end Cap Rate Survey shows that for Class A stabilized neighborhood centers, the weighted average cap rate

    was 6.4% across the 40 major markets surveyed. For Class A stabilized power centers, this figure stood at 6.9%, a roughly 60 basis point (bps)

    United States | Overview

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    3/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    4/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    4

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    United States | Overview(continued)

    technology-focused markets, our survey of cap rates shows that stabilized Class A assets in these markets are in the 5.5% range. By contrast, the

    distribution hubs noted have cap rates in the 5.25% range.

    The retail sector has lagged other property types throughout the recovery period. The leasing side has been weak relative to other sectors, with

    year-end availability rates for neighborhood and community centers down a mere 40 bps from the high-water mark set in the middle of 2011.

    Still, even though demand is weak, the growth in supply has been weaker with only about a one quarter of one percent of existing stock having

    been built in 2012. When looking at the income potential of the sector, the results of our Cap Rate Survey suggest two patterns in investor behavior.

    Broadly speaking, the markets with the most inventory have the lowest cap rates. Chicago, Atlanta and Houston have cap rates ranging from 6%

    to 6.25% for stabilized Class A neighborhood centers. Investors always place value on the exit liquidity implied by larger markets. Some markets

    stand out from this pattern, however, with Gateway markets posting lower cap rates even if they are smaller than other major markets. Boston andSeattle have stabilized Class A cap rates of 5.9% and 5.6%, respectively, with San Francisco posting a 4.9% cap rate.

    Multihousingcontinues to enjoy the healthiest fundamentals of the main property sectors. Vacancy stood at 5.3% at year-end, down from 5.6%

    at the end of 2011. The long-term average vacancy rate for the sector is anywhere between 5% and 6%, and as demand continues to grow, rents

    continue to climb as well. Effective market rents are up 4.2% from year-end 2011. Still, rents were up nearly 5% in 2011. Renters can absorb

    only so much of a rent increase, and demand for apartment units actually cooled in 2012. Net absorption came in at some 38,000 units in 2012,

    versus roughly 41,000 in 2011. Still, despite this slight slowdown in demand, cap rates for the multihousing sector are the lowest across the major

    property sectors. For Class A stabilized assets in urban locations, cap rates came in at 3.8% at yearend in San Francisco and at 3.9% in Los

    Angeles. Suburban assets in markets like San Jose and Orange County have stabilized Class A cap rates at 4% as well.

    In the hotelsector the revenue per available room (RevPAR) continued to grow in 2012. In the full-service segment, RevPAR was up 7.5% from

    a year earlier, while the limited-service sector is up 8.4% from 2011. This pace of RevPAR growth has been fairly constant since the economic

    recovery started in 2010. With a one-night lease term, the hotel sector was the first to show an improvement. Our Cap Rate Survey shows that

    investors are placing the most value on the RevPAR trends from the luxury segments, with an average 7% cap rate across markets. The economy

    segments have an average cap rate of 9.6%, though the range is fairly wide, with markets falling anywhere from 8% to 11.5% on the spectrum.

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    5/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    6/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    7/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    7

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Office CBD |Central Region

    Decrease

    Remain Flat

    Increase

    * Compared to 1st half 2012

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    Class A Class B Class C

    Stabilized Trend* Value-Add Trend* Stabilized Trend* Value-Add Trend* Stabilized Trend* Value-Add Trend*Austin 5.75% - 6.00%

    6.50% - 6.75%

    7.25% - 7.50%I 7.75% - 8.00%

    I9.00% - 9.25%I 9.25% - 10.00%

    Chicago 5.50% - 6.50% I

    7.00% - 8.00% 7.00% - 7.50% I

    8.00% - 9.00% 8.00% - 9.00% I

    9.00% - 11.00% I

    Cincinnati 8.50% - 9.00% 9.00% - 9.50% 10.00% - 10.50% 10.50% - 11.00% 11.00% - 11.50% I

    11.50% - 12.50% I

    Columbus 7.00% - 8.0 0%

    8.50% - 9.50% 8.50% - 10.00%

    9.50% - 10.50% 10.50% - 12.50% 11.00% - 13.00%

    Dallas 6.50% - 7.50%

    8.00% - 8.50%

    8.00% - 9.00%

    9.00% - 10.00% I

    9.50% - 12.00% I

    9.50% - 12.00%

    Detroit 9.00% - 10.00%I 10.00% - 12.00% I

    10.00% - 12.00% I

    10.00% - 14.00% I

    12.00% - 14.00% 14.00% - 16.00%

    Houston 5.50% - 6.00%

    7.00% - 8.00%

    7.00% - 8.00% I

    9.00% - 10.00% I

    8.00% - 9.00%

    12.00% - 14.00%

    Indianapolis 7.75% - 8.75% I

    8.25% - 10.25% I

    9.00% - 10.00% 9.50% - 10.50% I

    9.25% - 10.25%

    9.75% - 10.75%

    Kansas City 8.25% - 8.75% I

    9.50% - 10.00% 9.50% - 10.50% I

    11.00% - 12.00% 11.00% - 12.00% I

    12.00% + Minneapolis 6.50% - 7.50%

    I7.50% - 8.50%

    I9.50%

    I9.75% - 10.75%

    I10.00% - 11.50%

    I12.00% - 13.00%

    San Antonio 7.00% - 7.75% 8.00% - 8.75% 8.00% - 9.00% I

    8.50% - 9.50% I

    10.00% - 11.00%

    10.50% - 11.00%

    St. Louis 10.50% - 11.00% 12.00% - 12.50% 12.00% - 12.50% 14.00% - 14.50% 13.00% - 14.00%I

    15.00% - 16.00%I

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Austin

    Chicago

    Cincinnati

    Columbus

    DallasDetroit

    Houston

    Indianapolis

    Kansas City

    Minneapolis

    San Antonio

    St. Louis

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    8/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    9/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    10/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    10

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Office Suburban |Central Region

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Austin

    Chicago

    Cincinnati

    Columbus

    DallasDetroit

    Houston

    Indianapolis

    Kansas City

    Minneapolis

    San Antonio

    St. Louis

    Class A Class B Class C

    Stabilized Trend* Value-Add Trend* Stabilized Trend* Value-Add Trend* Stabilized Trend* Value-Add Trend*Austin 6.50% - 6.75%

    7.00% - 7.25%

    7.75% - 8.00%

    8.25% - 8.50% I

    9.25% - 9.50%

    9.75% - 10.00%

    Chicago 7.25% - 7.75%

    9.00% - 10.00% 8.00% - 9.50% I

    10.00% - 11.00% 11.25% - 13.25% 14.00% - 15.00% Cincinnati 8.00% - 8.50%I 8.50% - 9.00%I 9.00% - 9.50%

    9.50% - 10.50%

    I10.50% - 11.50%

    I11.00% - 12.50%I

    Columbus 7.50% - 8.00%

    8.50% - 9.50% 8.50% - 10.00%

    9.50% - 10.50% 10.50% - 12.50% I

    11.00% - 13.00% Dallas 6.50% - 8.00%I 7.00% - 8.00%

    7.50% - 9.00%

    8.00% - 9.00%

    8.75% - 10.00%

    10.00% - 12.00%

    Detroit 8.75% - 10.00%I 10.00% - 12.00%I 9.50% - 12.00%

    10.00% - 14.00% I

    10.00% - 14.00% 12.00% - 15.00%I

    Houston 6.00% - 6.50%

    7.50% - 8.00%I 7.50% - 8.50% I

    9.00% - 10.00% 8.50% - 10.00%

    12.00% - 14.00% Indianapolis 8.00% - 9.00%

    8.50% - 9.50%

    8.50% - 9.50%

    9.00% - 10.00%

    9.00% - 10.00%

    9.50% - 10.50%

    Kansas City 7.25% - 7.75%

    9.00% - 10.00%I 8.50% - 9.50%

    10.00% - 11.00% 10.00% - 11.00%I 12.00% + Minneapolis 6.50% - 8.25%I 8.00% - 9.00%I 8.75% - 9.75%

    I9.75% - 10.75%

    I10.00% - 12.00% 12.00% - 13.00%

    San Antonio 6.75% - 7.50%

    7.75% - 8.50%I 8.00% - 9.00%

    8.50% - 9.50%

    10.00% - 11.00%

    10.50% - 11.50%

    St. Louis 8.25% - 8.75% 8.50% - 9.50%

    9.25% - 9.75%

    9.75% - 10.50%

    10.00% - 12.00%

    12.00% - 15.00%I

    Decrease

    Remain Flat

    Increase

    * Compared to 1st half 2012

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    11/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    12/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    12

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Multihousing |Overview

    Among all sectors of commercial real estate investment, multihousing saw the earliest turnaround of investor interest, as the positive trends in

    income fundamentals seen over the last two years had been widely expected. The stabilizing influence of the debt provided by the government-sponsored enterprises (Freddie Mac and Fannie Mae) was an enormous help for market liquidity as well. Total multihousing transaction volumein 2012 came in at $84.6 billion, according to RCA. This figure is still off from the high-water mark of $105.6 billion set in 2007, but whenone thinks about the recent pace of growth, it is not quite so far off from the peak. The dollar value increase in volume from 2011 to 2012 was$27 billion. 2013 would only need to see an increase of $21 billion in volume to hit the 2007 record.

    CBRE Capital Markets and Valuation professionals expect that, for the 42 markets surveyed, cap rates for Class A stabilized assets for onlyeight will continue to compress in 2013. With the exception of Washington, DC, the markets where further compression is expected aresecondary and tertiary markets. That said, CBRE does not expect further compression in all secondary and tertiary markets. With Class Astabilized assets in suburban submarkets, the expectations for further compression are even smaller. Only 7 out of the 42 markets surveyed are

    expected to experience further compression in cap rates for these types of assets.

    Select from the list below to access the current multihousing infill/urban cap rates and forecast.

    Download a Complete Multihousing Infill/Urban Current Cap Rates Chart (PDF)

    Download a Complete Multihousing Infill/Urban Cap Rate Forecast Chart (PDF)

    Select from the list below to access the current multihousing suburban cap rates and forecast.

    Download a Complete Multihousing Suburban Current Cap Rates Chart (PDF)

    Download a Complete Multihousing Suburban Cap Rate Forecast Chart (PDF)

    http://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingInfillUrban_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingInfillUrban_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingSuburban_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingSuburban_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingInfillUrban_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingSuburban_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingSuburban_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_MultihousingInfillUrban_CapRates.pdf
  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    13/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    13

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Multihousing Infill/Urban |Eastern Region

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-AddAtlanta 4.75% - 5.25% 5.25% - 5.75% 5.25% - 5.75% 6.00% - 6.50% 7.00% - 7.50% 8.00% - 8.50%

    Baltimore 4.25% - 4.75% 4.50% - 5.00% 5.50% - 6.00% 5.75% - 6.50% 6.50% - 7.00% 7.25% - 7.75%

    Boston 4.00% - 4.50% 4.00% - 4.75% 4.75% - 5.25% 4.75% - 5.25% N/A N/A

    Charlotte 4.50% - 5.00% 5.25% - 5.75% 5.50% - 6.00% 6.00% - 6.50% 7.00% - 7.50% 7.50% +

    Jacksonville 5.20% - 5.40% 5.75% - 6.25% 6.00% - 6.30% 6.75% - 7.00% 6.75% - 7.25% 9.00% - 9.50%

    Manhattan 3.50% - 4.50% 4.00% - 5.00% 4.00% - 5.00% 4.50% - 5.50% 5.25% - 6.25% 5.50% - 6.50%

    Memphis 5.75% - 6.25% 5.75% - 6.25% 6.50% - 7.50% 6.50% - 7.50% 8.00%+ 8.00%+

    Miami 4.00% - 4.50% 4.75% - 5.00% 5.00% - 5.25% 5.25% - 5.50% 6.00% - 6.50% 6.25% - 7.00%

    Nashville 5.00% - 5.50% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00% 6.75% - 7.25% 7.25% - 7.75%

    Orlando 4.75% - 5.25% 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00% 7.00% - 8.25%

    Philadelphia 5.00% - 5.50% 5.00% - 5.50% 6.00% - 6.50% 6.25% - 6.75% 7.00% - 7.50% 7.50% - 8.00%

    Pittsburgh 6.00% - 6.50% 6.50% - 7.00% 6.50% - 7.00% 7.00% - 7.50% 8.00% - 8.50% 8.50% - 9.00%

    Raleigh 4.50% - 5.75% 5.75% - 6.50% 5.50% - 6.50% 6.50% - 7.50% 7.50% - 9.50% 9.50% - 10.50%

    Tampa 5.00% - 5.50% N/A 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75% 6.75% - 7.25%

    Washington, DC 4.00% - 4.40% 4.25% - 4.75% 5.25% - 5.75% 5.75% - 6.50% 6.50% - 7.00% 7.25% - 7.75%

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    CAPE RATE FORECAST*

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Atlanta

    Baltimore N/A

    BostonCharlotte

    Jacksonville

    Manhattan

    Memphis

    Miami

    Nashville

    Orlando

    Philadelphia

    Pittsburgh

    Raleigh

    Tampa

    Washington, DC N/A

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    14/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    15/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    15

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Multihousing Infill/Urban |Western Region

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Albuquerque

    Denver

    Inland Empire

    Los Angeles

    Orange CountyPhoenix

    Portland

    Sacramento

    Salt Lake City

    San Diego

    San Francisco

    San Jose

    Seattle

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Albuquerque 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75% 6.50% - 7.00% 7.00% - 7.50% 7.50% - 8.00%

    Denver 4.75% - 5.25% 5.50% - 5.75% 5.25% - 5.75% 5.50% - 6.00% 6.50% - 7.00% 6.75% - 7.25%

    Inland Empire 4.75% - 5.25% 5.00% - 5.50% 5.00% - 5.50% 5.25% - 5.75% 6.00% + 6.00% +

    Los Angeles 3.75% - 4.00% 4.50% - 4.75% 4.00% - 4.50% 4.75% - 5.25% 5.00% - 5.50% 5.50% - 6.00%

    Orange County 3.75% - 4.25% 4.00% - 4.50% 4.50% - 4.75% 5.00% - 5.50% 5.50% - 6.00% 6.00% - 6.50%

    Phoenix 4.75% - 5.00% 5.25% 5.25% - 5.75% 5.25% - 5.75% 6.00% - 6.50% 6.00% - 6.50%

    Portland 4.75% - 5.00% 5.00% - 5.25% 5.25% - 5.75% 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50%

    Sacramento 5.00% - 5.50% 5.50% - 6.00% 5.25% - 5.75% 5.50% - 6.00% 6.00% - 6.50% 6.50% - 7.00%

    Salt Lake City 5.25% - 5.75% 5.50% - 6.00% 5.75% - 6.00% 6.00% - 6.50% 6.00% - 6.25% 6.50% - 7.00%

    San Diego 3.75% - 4.25% 4.25% - 4.75% 4.50% - 5.00% 5.00% - 5.50% 5.50% - 6.00% 5.50% - 6.00%

    San Francisco 3.50% - 4.00% 4.00% - 4.25% 4.75% - 5.25% 5.25% - 5.75% 5.50% - 6.00% 6.00% - 6.50%

    San Jose 3.75% - 4.25% 4.00% - 4.50% 5.00% - 5.50% 5.75% - 6.25% 5.50% - 6.00% 6.00% - 6.50%

    Seattle 3.75% - 4.25% 4.50% - 5.00% 5.00% - 5.50% 5.50% - 6.00% 5.50% - 6.00% 6.25% - 7.25%

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    16/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    16

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Multihousing Suburban |Eastern Region

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Atlanta 5.25% - 5.75% 5.50% - 6.00% 5.75% - 6.25% 6.25% - 6.75% 7.25% - 7.75% 8.25% - 8.75%

    Baltimore 4.50% - 5.00% 4.75% - 5.25% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00% 7.25% - 7.75%

    Boston 4.25% - 5.25% 4.50% - 5.25% 5.25% - 5.50% 4.75% - 5.50% 6.50% - 6.75% 6.50% - 7.00%

    Charlotte 5.00% - 5.50% 5.50% - 6.00% 5.50% - 6.00% 6.00% - 6.50% 7.00% - 7.50% 7.50% - 8.00%

    Jacksonville 5.25% - 5.65% 6.00% - 6.50% 6.00% - 6.30% 7.00% - 7.25% 7.00% - 7.50% 9.25% - 9.75%

    Memphis 5.75% - 6.50% 5.75% - 6.75% 6.75% - 7.75% 6.75% - 7.75% 9.00% + 9.00% +

    Miami 4.50% - 4.75% 5.00% - 5.25% 5.00% - 5.50% 5.50% - 6.00% 6.25% - 6.75% 6.50% - 7.00%

    Nashville 5.50% - 6.00% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00% 7.00% - 7.50% 7.50% - 8.00%

    Orlando 5.00% - 5.75% 6.00% - 6.75% 5.75% - 6.50% 6.75% - 7.25% 6.50% - 7.50% 7.25% - 8.25%

    Philadelphia 5.00% - 5.50% 5.00% - 5.50% 6.00% - 6.50% 6.25% - 6.75% 7.00% - 7.50% 7.50% - 8.00%

    Pittsburgh 6.00% - 6.50% 6.50% - 7.00% 6.50% - 7.00% 7.00% - 7.50% 8.00% - 8.50% 8.50% - 9.00%

    Raleigh 4.75% - 6.00% 6.00% - 6.50% 5.75% - 6.75% 6.75% - 7.50% 7.75% - 9.75% 9.75% - 10.50%

    Tampa 5.25% - 5.75% 5.50% - 6.0% 5.75% - 6.25% 6.00% - 6.5% 6.25% - 6.75% 6.75% - 7.25%

    Washington, DC 4.25% - 4.75% 4.50% - 5.00% 5.50% - 6.00% 6.00% - 6.50% 6.50% - 7.00% 7.25% - 7.75%

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Atlanta

    Baltimore N/ABoston

    Charlotte

    Jacksonville

    Memphis

    Miami

    Nashville

    Orlando

    Philadelphia

    Pittsburgh

    Raleigh

    Tampa

    Washington, DC N/A

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    17/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    17

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Multihousing Suburban |Central Region

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-AddAustin 5.00% - 5.50% 5.00% - 5.50% 5.75% - 6.25% 5.75% - 6.25% 6.50% - 7.00% 6.50% - 7.00%

    Chicago 5.00% - 5.50% 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50% 7.00% - 7.50% 7.25% - 7.75%

    Cincinnati 6.00% - 6.50% 6.50% - 7.00% 7.00% - 7.50% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50%

    Cleveland 6.50% - 7.00% N/A 8.00% - 8.50% 8.25% - 8.75% 8.50% - 9.00% 9.00% - 9.50%

    Columbus 6.00% - 6.50% 6.25% - 6.75% 7.25% - 7.75% 7.50% - 8.00% 8.75% - 9.25% 9.50% - 10.00%

    Dallas 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75% 6.50% - 7.25% 7.25% - 7.75% 7.75% - 8.25%

    Detroit 6.75% - 7.50% 7.50% - 8.50% 7.50% - 8.25% 8.00% - 9.00% 8.75% - 9.50% 9.50% - 11.00%

    Houston 5.75% - 6.25% 6.25% - 6.75% 6.75% - 7.25% 7.25% - 7.75% 7.75% - 8.25% 8.25% - 8.75%

    Indianapolis 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75% 6.75% - 7.25% 7.75% - 8.25% 8.25% - 8.75%

    Kansas City 6.00% - 6.25% 6.00% - 6.50% 7.00% - 7.25% 7.50% - 7.75% 8.50% - 9.00% 9.50% - 10.00%

    Minneapolis 5.50% - 5.75% 5.75% - 6.00% 6.25% - 6.50% 6.75% - 7.00% 8.00% - 8.50% 8.75% - 9.25%

    Oklahoma City 6.25% - 6.75% 6.50% - 6.75% 6.75% - 7.25% 6.85% - 7.35% 9.00% - 9.50% 9.50% - 10.00%San Antonio 5.50% - 6.00% N/A 6.50% - 7.00% 6.75% - 7.25% 7.00% - 7.50% 7.50% - 8.00%

    St. Louis 5.50% - 6.00% 5.75% - 6.25% 6.10% - 6.75% 6.50% - 6.90% 8.00% - 9.50% 8.25% - 9.50%

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Value-Add Stabilized Value-Add Stabilized Value-Add

    Austin

    Chicago

    Cincinnati

    Cleveland

    Columbus

    Dallas

    Detroit

    Houston

    Indianapolis

    Kansas City

    Oklahoma City

    Minneapolis

    San Antonio N/A

    St. Louis

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    18/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    19/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    19

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Retail |Overview

    The retail sector continues to see increases in sales volume despite lagging other property sectors into the early stages of the recovery. In 2012,

    sales volume reached $52.8 billion, up from the $44.1 billion pace set in 2011. This 19.7% increase for retail overall masks divergent trends

    among retail sub-types. Sales volume for strip-center retail was down in 2012, falling to $20.7 billion from the $25.6 billion recorded in 2011.

    The mall segment, though, saw tremendous growth, jumping from $18.5 billion in sales volume in 2011 to $32.1 billion in 2012. This shift

    reflects a bit of a change in investor perception of risk. For much of the recovery, investors who were interested in retail were only pursuing

    safe, stable, grocery-anchored centers. Investors regarded anything tied to the discretionary spending patterns of consumers with some caution,

    and thus, investment in the mall segment fell to a low of $8 billion in 2009.

    Evidence from our survey suggests that there is further room for cap rate compression in the year ahead. For Class A stabilized neighborhood

    center assets, our professionals expect further compression in 18 of the 40 markets surveyed, and, for Class A stabilized power center assets,

    19 of the markets sur veyed. With average Class A stabilized cap rates of 6.4% and 6.9% for neighborhood and power centers, respectively,

    and debt costs somewhere in the 4%-to-5% range according to the results of the quarterly CBRE Lender Forum report, there is some room for

    further compression. There is still some untapped opportunity here, given that investors were hesitant about the sector for so many years.

    Select from the list below to access the current neighborhood/community center (grocery anchored) retail cap rates and forecast.

    Download a Complete Retail Neighborhood/Community Center (Grocery Anchored) Current Cap Rates Chart (PDF)

    Download a Complete Retail Neighborhood/Community Center (Grocery Anchored) Cap Rate Forecast Chart (PDF)

    Select from the list below to access the current power center retail cap rates and forecast.

    Download a Complete Retail Power Center Current Cap Rates Chart (PDF)

    Download a Complete Retail Power Center Cap Rate Forecast Chart (PDF)

    Select below to access the current high street retail cap rates and forecast.

    Download a Complete High Street Retail Current Cap Rates and Forecast Chart (PDF)

    http://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailCommunityCenter_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailCommunityCenter_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailPowerCenter_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailPowerCenter_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_HighStreetRetail.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_HighStreetRetail.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailPowerCenter_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailCommunityCenter_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailPowerCenter_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_RetailCommunityCenter_CapRates.pdf
  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    20/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    21/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    22/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    22

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

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

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    Class A Class B Class C

    Stabilized Trend* Stabilized Trend* Stabilized Trend*Albuquerque 7.50% - 8.50%

    8.00% - 9.00%

    9.00% - 10.00%

    Denver 6.50% - 7.00% 7.50% - 8.00% 9.00% - 9.50%

    Las Vegas 6.50% - 7.50%I 7.00% - 8.00%

    7.50% - 10.00%

    Los Angeles 5.25% - 5.75%

    6.25% - 6.75%I 8.00% - 8.75%

    Orange County 5.25% - 5.75%I 6.25% - 6.75%I 8.00% - 8.75%

    Phoenix 5.75% - 6.25%

    6.50% - 7.00%I 8.00% - 9.00%I

    Portland 5.50% - 6.25%

    6.75% - 7.75%

    8.00% - 10.00%

    Sacramento 7.00% - 8.00%

    8.00% - 9.00%

    9.00% +I

    Salt Lake City 7.50% - 8.20% 8.20% - 8.60%I 9.00% - 10.00%

    San Diego 5.25% - 5.75%I 6.25% - 6.75%I 8.00% - 8.75%

    San Francisco 4.50% - 5.25%

    6.00% - 6.75%

    7.25% - 7.75%

    San Jose 6.00% - 6.75%I 7.00% - 7.75%I 7.75% - 9.00%

    Seattle 5.50% - 5.75%

    6.50% - 7.50% 7.50% - 9.50%I

    * Compared to 1st half 2012

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Stabilized Stabilized

    Albuquerque

    Denver

    Las Vegas

    Los AngelesOrange County

    Phoenix

    Portland

    Sacramento

    Salt Lake City

    San Diego

    San Francisco

    San Jose

    Seattle

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    23/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    24/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    25/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    25

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Retail Power Center |Western Region

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    Class A Class B Class C

    Stabilized Trend* Stabilized Trend* Stabilized Trend*Albuquerque 7.00% - 8.00% 8.00% - 9.00% 9.00% - 10.00%

    Denver 6.75% - 7.25% I

    7.75% - 8.25%I 9.00% - 10.00% Las Vegas 6.50% - 7.50% 7.00% - 8.00% 7.50% - 9.00%

    Los Angeles 6.00% - 6.75% I

    7.00% - 8.00% 8.50% - 9.50% Orange County 6.00% - 6.75% 7.00% - 8.00%I 8.50% - 9.50%I

    Phoenix 6.00% - 6.50% I

    6.50% - 7.50%I 8.00% - 9.00%I

    Portland 6.00% - 6.75%

    7.25% - 8.25%

    8.50% - 10.50%I

    Sacramento 6.50% - 7.50%

    7.00% - 8.50%

    8.50% - 10.50% Salt Lake City 7.50% - 8.50% 7.00% - 8.50%I 8.50% - 10.50%I

    San Diego 6.00% - 6.75% 7.00% - 8.00% I

    8.50% - 9.50%I

    San Francisco 5.25% - 6.25%

    6.00% - 6.75%

    8.00% - 9.00%

    San Jose 6.25% - 6.75% I

    7.25% - 7.75%I 9.00% - 9.50%

    Seattle 6.25% - 7.50% I

    7.00% - 8.50%I 8.00% - 10.00%I

    * Compared to 1st half 2012

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Stabilized Stabilized

    Albuquerque

    Denver

    Las Vegas

    Los Angeles

    Orange County

    Phoenix

    Portland

    Sacramento

    Salt Lake City

    San Diego

    San Francisco

    San Jose

    Seattle

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    26/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    26

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    High Street Retail | National

    CAP RATE FORECAST*

    Class A

    StabilizedBoston

    Chicago

    Los Angeles

    Manhattan

    Miami

    Philadelphia

    San Francisco

    Seattle

    Washington, DC

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates a re likely to trend in 1st half of 2013 in their local market.

    Class A

    Stabilized Trend*Boston 3.75% - 5.00%I

    Chicago 5.00% - 5.50% Los Angeles 4.50% - 5.50% Manhattan 4.00% - 5.00%

    Miami 4.00% - 6.00% Philadelphia 5.75% - 6.25%I

    San Francisco 4.50% - 5.50% Seattle 4.50% - 5.50%

    Washington, DC 5.50% - 6.00%

    Decrease

    Remain Flat

    Increase

    * Compared to 1st half 2012

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    27/38

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    28/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    28

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Industrial |Eastern Region

    Class A Class B Class C

    Stabilized Trend* Stabilized Trend* Stabilized Trend*Atlanta 6.25% - 7.50%I 7.25% - 8.50%

    8.50% - 10.00%

    Baltimore/Washington Corridor 5.75% - 6.25%

    6.50% - 7.00%

    7.00% - 7.75%

    Boston 7.00% - 7.50%I 7.75% - 8.75%

    10.00% - 11.00%

    Charlotte 6.75% - 7.50%

    7.25% - 8.00%

    8.00% - 8.25%

    Eastern PA (I-78/I-81) Corridor 5.75% - 6.25%

    6.75% - 7.50%

    7.75% - 8.50%

    Jacksonville 7.50% - 7.75%I 8.50% - 9.50%

    9.50% - 12.00%

    Memphis 7.25% - 8.25%

    8.25% - 9.00%I 9.00% - 10.00% I

    Miami 5.25% - 5.75%I 5.50% - 6.25%

    6.00% - 7.00%

    Nashville 6.50% - 8.00%

    8.00% - 10.00%I 9.00% - 11.00% I

    Northern New Jersey 5.00% - 5.50% N/A 5.75% - 6.50% N/A 6.50% - 7.25% N/AOrlando 6.75% - 7.50%I 8.00% - 9.00%I 9.00% - 11.00% Pittsburgh 7.50% - 8.25%I 8.50% - 9.50%I 9.50% - 10.50%

    Raleigh 6.50% - 7.50%

    7.50% - 8.50%I 9.00% - 12.00%

    Tampa 6.50% - 7.50%I 7.25% - 8.25%I 9.00% - 9.75% I

    * Compared to 1st half 2012

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Stabilized Stabilized

    Atlanta

    Baltimore/Washington Corridor

    Boston

    Charlotte

    Eastern PA (I-78/I-81) Corridor

    Jacksonville

    Memphis

    Miami

    Nashville

    Northern New Jersey

    Orlando

    Pittsburgh

    Raleigh

    Tampa

    C S

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    29/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    29

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Industrial |Central Region

    Class A Class B Class C

    Stabilized Trend* Stabilized Trend* Stabilized Trend*Austin 6.75% - 7.75%I 7.75% - 8.25%

    8.50% - 8.75%

    Chicago 5.75% - 6.00%

    6.75% - 7.25%

    8.00% - 9.00%

    Cincinnati 7.00% - 7.75%I 8.00% - 9.00% 9.00% - 10.00%

    Cleveland 7.25% - 8.00% 8.50% - 9.00% 11.00% Columbus 7.00% - 8.00%

    8.00% - 9.00%

    10.00% - 13.00%

    Dallas 5.90% - 6.80%I 7.00% - 8.00%

    8.50% - 9.50%IDetroit 7.00% - 8.50%

    8.50% - 10.00%

    10.00% - 13.00%

    Houston 5.80% - 6.75%I 6.75% - 7.75% 8.50% - 9.50%

    Indianapolis 6.75% - 7.25%I 8.00% - 9.00%I 9.50% - 10.50% Kansas City 7.00% - 7.50%I 8.00% - 8.50%I 9.00% - 10.00%IMinneapolis 6.50% - 7.25%I 7.50% - 8.50%

    9.00 % - 11.00%I

    San Antonio 6.50% - 7.50%I 7.75% - 8.50%

    9.00% - 10.50%

    St. Louis 7.75% - 8.25% 8.25% - 9.00%I 9.00% - 11.00%

    Decrease

    Remain Flat

    Increase

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Stabilized Stabilized

    Austin

    Chicago

    Cincinnati

    Cleveland Columbus

    Dallas

    Detroit

    Houston

    Indianapolis

    Kansas City

    Minneapolis San Antonio St. Louis

    * Compared to 1st half 2012

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    C R S

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    30/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    30

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Industrial |Western Region

    CAP RATE FORECAST*

    Class A Class B Class C

    Stabilized Stabilized Stabilized

    Albuquerque

    Denver

    Inland Empire

    Las Vegas

    Los Angeles

    Orange County

    Phoenix

    Portland

    Sacramento

    Salt Lake City

    San Diego San Francisco San Jose Seattle

    Class A Class B Class C

    Stabilized Trend* Stabilized Trend* Stabilized Trend*Albuquerque 7.50% - 8.50%

    8.00% - 9.25%

    9.00% - 10.00%

    Denver 6.00% - 6.50%I 6.50% - 7.00%I 8.50% - 9.50%

    Inland Empire 4.75% - 5.75%I 5.85% - 6.50%I 6.50% - 7.00%

    Las Vegas 7.50% - 8.50% 8.50% - 9.50% 9.50% - 10.50% Los Angeles 4.75% - 5.75%

    5.85% - 6.50%I 6.50% - 7.00%

    Orange County 5.00% - 5.50%I 5.75% - 6.25%

    7.00% - 7.75%IPhoenix 6.50% - 7.50% 7.50% - 8.50% 8.50% - 9.25%

    Portland 7.00% - 8.00%I 8.50% - 9.50% 9.50% - 10.50% Sacramento 7.50% - 8.00%

    8.00% - 8.50%

    8.50% +I

    Salt Lake City 7.00% - 7.50%

    7.00% - 8.00%

    8.00% - 10.00%

    San Diego 5.50% - 6.00%

    6.00% - 6.50%

    7.25% - 7.75%

    San Francisco 5.00% - 6.00%I 6.00% - 7.25%I 8.00% - 10.00%ISan Jose 5.00% - 6.00%I 6.00% - 7.25%I 8.00% - 10.00%I

    Seattle 5.00% - 5.75%I 6.00% - 6.75%I 6.75% - 7.25%

    Decrease

    Remain Flat

    Increase

    * Compared to 1st half 2012

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    C R t S

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    31/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    31

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Hotels |Overview

    The CBRE Cap Rate Survey provides information on the hotel sector that is unavailable elsewhere. With total transaction activity in the sector

    representing roughly 10% of annual activity across all commercial property sectors, often times there are simply not enough transactions todevelop reliable benchmarks of sales comparables. For a market where comparable sales are thin, our approach of combining the insights of

    the CBRE Capital Markets and Valuation professionals as to the levels at which assets will trade is good way to get a relative sense of pricing.

    Transaction activity for 2012 is off from a year earlier. According to the figures from RCA, investment volume in 2012 stood at $19.6 billion,

    versus the $20 billion seen in 2011. This decline was a bit front-loaded, with declines starting in the fourth quarter of 2011 and continuing

    through the third quarter of 2012. Activity turned the corner in Q4 2012, rising 49.5% from a year earlier, but it is too soon to tell if this

    increase is a just blip, or rather a trend toward recovery.

    The evidence from the CBRE Cap Rate survey suggests that the fourth-quarter increase may continue into 2013 for certain hotel sub-types. Across

    the 36 markets surveyed, 13 markets in the limited-service segment and 8 markets in the economy segment are expected to see continued cap

    rate compression in 2013. In the luxury and full-service segments, however, only three markets are earmarked for such compression.

    Select from the list below to access the current hotels cap rates and forecast.

    Download a Complete Hotels Current Cap Rates Chart (PDF)

    Download a Complete Hotels Cap Rate Forecast Chart (PDF)

    C R t S

    http://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_Hotels_CapRates.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_Hotels_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_Hotels_Forecast.pdfhttp://marketing.cbre.com/IGMC/CapRate_Feb2013/2H_2012_CapRateTable_Hotels_CapRates.pdf
  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    32/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    32

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Hotels |National

    * Compared to 1st half 2012

    Luxury Full Service Select Service Economy

    Stabilized Trend* Stabilized Trend* Stabilized Trend* Stabilized Trend*Albuquerque 7.00% - 7.25%

    8.00% - 9.00%I 8.25% - 9.50% 9.50% - 11.00%

    Atlanta 7.00% - 8.00%I 8.00% - 9.50% 8.50% - 10.00% 9.00% - 11.00%I

    Austin 7.25% - 7.50%

    8.00% - 8.25%

    8.75% - 9.00%

    9.75% - 10.00%I

    Baltimore 6.50% - 7.50%I 7.00% - 7.50% 7.00% - 8.00% 8.00% - 8.50%

    Boston 6.50% - 7.00% 7.00% - 8.00%

    8.00% - 10.00%I 9.00% - 11.00%

    Charlotte 7.00% - 8.00%

    8.00% - 9.00% 9.00% - 10.00% 11.00% - 12.00%

    Chicago 6.00% - 7.50% 6.00% - 7.50%

    7.00% - 9.00%I 7.00% - 9.00%

    Cincinnati 6.50% - 9.00% N/A 7.00% - 9.50%

    8.00% - 10.00%

    8.50% - 11.00%

    Cleveland 6.50% - 9.00% N/A 7.00% - 9.50%

    8.00% - 10.00%

    8.50% - 11.00%

    Columbus 8.00% - 9.00% N/A 9.00% - 10.00%

    9.00% - 10.00%I 9.50% - 12.00%

    Dallas 7.00% - 8.00% 7.50% - 8.50%I 7.50% - 8.50%

    9.00% - 11.00%

    Denver 6.25% - 6.75%

    7.75% - 8.25%

    7.75% - 8.75%I 9.25% - 9.75%

    Detroit 8.00% - 8.50%I 9.00% - 10.00% I

    9.50% - 10.50%I 10.50% - 11.50%

    Jacksonville 6.00% - 8.00%

    7.00% - 9.00%

    8.00% - 10.00%I 9.00% - 11.00%

    Kansas City 8.00% - 8.50%I 9.25% - 10.00% 8.50% - 9.00%

    10.00% - 11.00%

    Las Vegas 7.00% - 8.00%

    7.00% - 8.00% I 7.50% - 9.00%

    9.00% - 11.00%I

    Los Angeles 7.00% - 7.75%I 7.00% - 8.00% 7.00% - 8.00% 8.00% - 8.50%

    Manhattan 4.50% - 5.50%I 6.00% - 7.00% I 6.50% - 7.50%

    8.00% - 9.00%

    Miami 6.00% - 7.00%

    7.00% - 8.00%

    7.50% - 9.00% 8.00% - 9.50%

    Minneapolis 6.00% - 7.75% 7.50% - 9.50% 8.00% - 10.00% 8.50% - 11.00%

    Nashville 7.00% - 8.00%

    8.00% - 9.50% 8.50% - 10.00% 9.00% - 11.00%

    Orange County 7.00% - 7.75%I 7.00% - 8.00% 7.00% - 8.00% 8.00% - 8.50%I

    Orlando 6.00% - 8.00%

    7.00% - 9.00% 8.00% - 10.00% 9.00% - 11.00%

    Philadelphia 7.00% - 8.00%I 7.00% - 7.50%I 7.00% - 7.50%I 8.00% - 8.50%I

    Phoenix 6.50% - 8.00% 7.50% - 9.00% 7.75% - 9.00%

    9.50% - 12.00% Pittsburgh 7.00% - 7.50% N/A 8.00% - 8.50%

    8.25% - 9.00%

    9.00% - 10.00%

    Portland 6.00% - 8.00% 7.00% - 9.00% 8.50% - 10.50% 9.00% - 11.00%

    Raleigh 7.50% - 8.50%I 7.75% - 8.75%

    8.25% - 8.75%

    10.00% - 11.00%I

    Sacramento 8.00% - 9.00% N/A 8.50% - 9.50% N/A 9.00% - 10.00% N/A 9.00% - 10.50% N/A

    San Antonio 7.00% - 8.00%I 7.50% - 8.50% 7.50% - 8.50%I 9.00% - 11.00%I

    San Diego 7.00% - 7.75%I 7.00% - 8.00%

    7.00% - 8.00%

    8.00% - 8.50%

    San Francisco 5.50% - 6.50% 6.50% - 7.50%

    7.50% - 9.50% 9.00% - 11.00%

    San Jose 6.50% - 7.50% 7.00% - 8.00%I 7.50% - 9.50% 9.00% - 11.00%I

    Seattle 6.00% - 8.00% 7.00% - 9.00% 8.50% - 10.50%I 9.50% - 11.00%

    Tampa 6.00% - 8.00%

    7.00% - 9.00%

    8.00% - 10.00%

    9.00% - 11.00%I

    Washington, DC 6.50% - 7.50%I 7.00% - 7.50% 7.00% - 8.00% 8.00% - 8.50%

    Cap Rate Survey

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    33/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    33

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Hotels |National

    Decrease

    Remain Flat

    Increase

    * Cap Rate Forecast represents the CBRE professionals opinion of where cap rates are likely to trend in 1st half of 2013 in their local market.

    Luxury Full Service Select Service Economy

    Stabilized Stabilized Stabilized Stabilized

    Albuquerque

    Atlanta

    Austin

    Baltimore

    Boston

    Charlotte

    Chicago

    Cincinnati

    Cleveland

    Columbus

    Dallas

    DenverDetroit

    Jacksonville

    Kansas City

    Las Vegas

    Los Angeles

    Miami

    Minneapolis

    Nashville

    New York City

    Orange County

    Orlando

    Philadelphia

    Phoenix

    Pittsburgh

    Portland

    Raleigh

    Sacramento

    San Antonio

    San Diego

    San Francisco

    San Jose

    Seattle

    Tampa

    Washington, DC

    Cap Rate Survey

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    34/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    34

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Appendix |Definitions

    Cap Rate

    The going-in cap rate usually refers to the initial yield and is calculated as the ratio of the projected net income in the first year of the holdingperiod over the acquisition price of the property. This measure also represents the investors income return in the first year, but also in subsequent

    years if NOI remains stable.

    Stabilized Property Cap Rates

    To derive the cap rate for a stabilized property assume the asset is leased at current market rents and has an occupancy rate in line with the long-

    run market average. Based on these assumptions, use the in-place NOI and the probable sales price to calculate the stabilized cap rate.

    Cap Rates (Office, Industrial, Retail, and Hotel)

    Cap rate ranges are best estimates provided by CBRE professionals based on recent trades in their respective market as well as recent interactions

    with investors. The ranges represent those cap rates that a given property will trade at in this current market. Stabilized cap rates are based on

    in-place NOI for the latest year, before being adjusted for reserves. Value-add cap rates are based on projected stabilized NOI. Actual cap rates

    within each asset class will vary, occasionally outside of the stated ranges, based on asset location/quality and property-specific opportunities for

    NOI enhancement.

    Cap Rates (Multihousing only)

    Cap rate ranges are based on an estimated NOI derived by annualizing the last 90 days of revenue and subtracting what buyers would estimate

    as stabilized, year one expenses after adjustments for real estate taxes and reserves. Actual cap rates within each asset class will vary, occasionally

    outside of the stated ranges, based on asset location/quality and property-specific opportunities for NOI enhancement.

    Value-Add Property Cap Rates (Office only)

    To derive the value-add cap rate use a sales prices that would be achieved by a property underperforming in its market, whether through

    abnormally high vacancy rates or through rents below those that are currently being achieved in the market. Assume the property is then stabilized

    to achieve market rents and an occupancy rate in line with the markets long run average to arrive at a stabilized NOI. Use the stabilized NOI

    when calculating the Value-Add Cap Rate.

    Cap Rate Survey

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    35/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    35

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Appendix |Definitions (continued)

    Value-Add Property Cap Rates (Multihousing only)

    To derive the value-add cap rate use the return on cost based on the projected stabilized NOI value divided by the total investment.

    Stabilized Property

    A property that has an occupancy level at or above the local average and is leased at market rents.

    Value-Add Property (Office & Multihousing only)

    An underperforming property that has an occupancy level below the local average and/or is leased at below-market rents.

    CBD

    The Central Business District of a major city.

    Suburban

    Mainly residential area located within close proximity to a major city.

    Class A

    Best-of-class product, attract larger, top quality tenants with 5- and 10-year leases, often newer construction.

    Class BOlder product, mostly 5-year leases, typically previously owned.

    Class C

    Typically an older building that of fers space without amenities. Attracts moderate to low income tenants.

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    36/38

    Cap Rate Survey

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    37/38

    IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotels

    Appendix

    Cap Rate SurveyFebruary 2013

    37

    >IN THIS ISSUE:

    Overview

    Office

    Multihousing

    Retail

    Industrial

    Hotel

    Appendix

    Appendix |Definitions (continued)

    MULTIHOUSING-SPECIFIC DEFINITIONS

    Infill/Urban

    Area considered inner-city plus built up environs, characterized by high population density and vast human features in comparison to areas

    surrounding it.

    Suburban

    Surrounding residential areas of a larger city. Outer edge of a large city, or several aggregates of distant residential areas.

  • 8/14/2019 Cap Rate Survey Feb 2013.pdf

    38/38

    Copyright 2013 CBRE Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified

    it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for useby CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist.

    +1 888.707.3908

    www.cbre.com/capitalmarketswww.cbre.com/research

    www.cbre.com/valuation

    CHRIS LUDEMAN

    President

    CBRE Capital Markets

    JIM COSTELLO

    Managing Director, Americas Research

    CBRE Global Research & Consulting

    BRIAN STOFFERS

    Chief Operating Officer, Capital Markets

    President, Debt & Equity Finance

    CBRE Capital Markets

    RAY WONG

    Executive Director, Americas Research

    CBRE Global Research & Consulting

    ASIEH MANSOUR

    Head of Research, Americas

    CBRE Global Research & Consulting

    THOMAS MCDONNELL

    President

    CBRE Valuation and Advisory Services