CBRE CAP RATE SURVEY - f.tlcollect.comf.tlcollect.com/fr2/213/58732/CapRateSurvey_Aug2013.pdf · The mid-year 2013 CBRE Cap Rate Survey shows that in the office sector, the average

CBRE CAP RATE SURVEY

Click to Enter

A CBRE Publication First Half 2013

In This Issue:

Overview pg 2

Office pg 8

Multi-housing pg 17

Retail pg 26

Industrial pg 36

Hotels pg 41

Appendix pg 44

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix

Cap Rate Survey First Half 2013

2

<< | >>United States | Overview

The 10-year Treasury (UST) was measurably lower than 2% from April 2012 through early May of this year, but this recent period of record-low

interest rates could not last forever. Between May 1 and August 1, 2013, the 10-year UST shot up 110 basis points (bps) due to fears of an early

end to the Federal Reserve Bank’s Quantitative Easing (QE) program. The expectation of many market participants today is that interest rates will

be moving even higher than current levels. The possibility of such further increases weighs heavily on the minds of commercial real estate investors.

Interest rates will certainly be moving higher than they are today—that concept is accepted as a given by most investors. What really matters for

commercial real estate performance is where interest rates will ultimately settle, and what factors are driving these rate increases. There are some

positive forces behind at least a portion of the interest rate increase, and these forces can help offset the impact on asset values.

Where will the 10-year Treasury settle in the end? There are a variety

of opinions regarding this question. The Wall Street Journal produces a

monthly consensus survey of roughly 50 top economists on this issue, and

the chart at right shows a summary of their responses for August 2013.

A few believe the Treasury will go quite high—reaching 4.5% to 5.0% by

2015—while others expect we will stay within a sub-3.0% range over the

next two years. In general, these forecasts have the 10-year UST averaging

2.8% at year-end 2013 and 3.8% at year-end 2015. Should these predicted

increases be keeping commercial real estate investors awake at night?

The mid-year 2013 CBRE Cap Rate Survey shows that in the office sector,

the average cap rate for stabilized Class A assets in CBD locations is

5.7%. Throughout the second quarter, the 10-year UST averaged 2.0%,

yielding a 370-bps spread between the “risk-free” asset and the one-year

return on such high-quality properties. Would a move to 3.8% for the 10-

year Treasury imply a cap-rate shift of up to 7.5% for high-quality CBD

office assets?

Make no mistake: If cap rates for stabilized Class A office assets in CBD

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

2015

.4

Ten Year Treasury, %

A Wide Variety of Outlooks for the Ten-Year Treasury

Source: WSJ Consensus Survey, August 2013

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


3

<< | >>United States | Overview (continued)

locations moved from 5.7% to 7.5% in two years, asset values would be obliterated, suffering a roughly 25% decline, assuming no changes in

property income. However, this line of thinking is flawed, as there is no constant spread between cap rates and interest rates over time. In fact, as

shown in the following chart, the appraisal-based cap-rate data for the high-quality CBD office assets held by investment managers contributing

data to NCREIF have exhibited a roughly 250-bps spread to the 10-year Treasury. The comparable spread for the CBRE Cap Rate Survey figure

would be 330 bps, given the inclusion of data in secondary and tertiary markets where NCREIF is typically under-represented.

The spread between cap rates and interest rates has not remained constant over time, just as investor perceptions of the risks in the CBD office

Cap Rate Spreads to the Ten-Year Treasury Are Not Constant

0

50

100

150

200

250

300

350

400

450

500

1993

.1

1993

.4

1994

.3

1995

.2

1996

.1

1996

.4

1997

.3

1998

.2

1999

.1

1999

.4

2000

.3

2001

.2

2002

.1

2002

.4

2003

.3

2004

.2

2005

.1

2005

.4

2006

.3

2007

.2

2008

.1

2008

.4

2009

.3

2010

.2

2011

.1

2011

.4

2012

.3

BPS Spread, CBD Office Cap Rates to Ten-Year

Since 1993, the spread

has averaged 250 bps

Source: NCREIF, Q2 2013

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


4

<< | >>United States | Overview (continued)

sector have not remained constant. This is true for all major property sectors, with the perception of risk rising and falling. This perception of risk is

still at a high level relative to the long-term trend, as limited job growth creates some hesitancy around future income given the prospects of leasing

space at higher rents.

This hesitancy is where the positive forces behind the interest-rate increases surface. While low interest rates early in 2013 can be partially

attributed to the QE program helping to hold down the long end of the yield curve, the low levels were also due to investors’ expectations for only

moderate job growth and for limited hiring and investment activity on the part of corporate America. The market consensus is that the Fed will start

tapering the QE program in September 2013; however, the tapering may be delayed if economic indicators become less positive.

Beyond 2013, interest rate increases will be more heavily driven by the fact that investors will have more attractive alternatives for their investment

capital than to warehouse it in the safety of government debt. Firms will be deploying capital to grow their businesses with investments such as

taking on new workers. CBRE’s Econometric Advisors business unit (CBRE-EA) is forecasting that U.S. job growth will expand to an average monthly

pace of 175,000 in 2014 and 2015 as the recovery gains momentum. To put this figure in context, in the 2003-to-2006 timeframe, an average of

129,000 jobs were added per month.

Because of this accelerating job growth, moving forward we expect the income side of commercial property investing to accelerate. For instance,

CBRE-EA is forecasting that rent growth in the CBD office market nationally will average 3.6% per year over the next two years, and 4.0% per

year over the next five. This expansion is stemming from a combination of limited construction and a recovery in job growth that is pushing down

vacancy rates and providing asset managers more leverage in negotiating lease renewals.

As income grows and leasing becomes more steady, the spread between cap rates and the “risk-free” rate should continue to compress from the

current high levels. If, for example, the spread between the CBRE Cap Rate Survey Class A CBD office benchmark compressed to just the long-

term 330-bps spread by the end of 2015 (again, assuming no income changes along the way), an investment in the current environment would

experience value deterioration of 20%. While better than a 25% loss, a 20% loss would still be quite painful.

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


5

<< | >>

A contrary perspective is that cap rates have much more room to fall over the next two years. In previous periods of recovery to expansion, the

spread did not fall to the long-term average and stop there—and it is not likely to do so this time around either. Because of the unwinding of the

deleveraging process that has hampered the U.S. economy throughout the recession, there is in the current environment an expectation that more

debt will become available in the coming years, providing greater investment capital for real estate.

Factoring in the impact of increased debt availability moving forward, CBRE-EA forecasts that cap rates will fall even further below their long-term

levels by 2015. In the case of the Class A CBD office market, this compression would suggest that cap rates will reach the 6.3% level by the end

of 2014. While such an increase would represent a 10% loss of value if there were no income changes to accompany the cap rate expansion, we

expect the market itself to see 3.6%-per-year rent growth over the next two years. This rent growth will help to cushion the cap-rate induced change

in values. The following table highlights the relevant impacts for each of the major sectors covered by the CBRE Cap Rate Survey.

Class A Assets

Stabilized Cap Rates

Return on Cost for Value-Add

BPS Spread

Stabilized Class A Cap Rates for Year End 2015

Value Change in Two Years Solely From

Cap Rate Change

Annual Income Growth Needed Over Ten Years for

an 8% Unleveraged IRR

Office CBD 5.7% 6.8% 110 6.3% -10.0% 3.1%

Office Suburban 6.8% 7.9% 107 7.4% -8.5% 1.9%

Industrial 6.3% 7.1% 87 6.9% -9.3% 2.8%

Retail Neighborhood 6.3% 6.9% 64 6.8% -7.0% 2.5%

Retail Power Centers 6.9% 7.6% 72 7.3% -6.5% 1.9%

Multi-Housing Infill 4.6% 5.3% 77 4.7% -3.2% 4.1%

Multi-Housing Suburban 5.3% 5.9% 57 5.4% -2.8% 3.2%

Luxury Hotels, CBD 7.0% N/A N/A 7.3% -4.5% 1.2%

Luxury Hotels, Suburbs 7.5% N/A N/A 7.8% -4.2% 0.7%

United States | Overview (continued)

Cap Rate Outlook

Source: CBRE Cap Rate Survey, CBRE Econometric Advisors

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


6

<< | >>

The income growth needed to cushion the loss in value that should be seen from cap rate expansion would be somewhat high relative to historical

trends over a two-year period for the core-like stabilized Class A assets. Over an extended holding period however, the short term impact of cap

rate changes can be cushioned more fully with years of income growth. Given the more extended forecast for cap rates from the CBRE-EA team,

over a 10-year period, the income growth needed to achieve an 8% unleveraged IRR is well below the rate of inflation for most of the property

sectors highlighted in the preceding table.

By mid-year 2013, the office vacancy rate was at 15.2% nationally, versus 15.8% for mid-year 2012. This 60-bps decline in the office vacancy rate

came about from declining vacancy in both CBD and suburban submarkets, though the bulk of the decline stemmed from the suburban submarkets.

The vacancy rate for CBD submarkets fell 40 bps from one year earlier to hit 12.3%. The vacancy rate for suburban submarkets fell more quickly,

however, dropping some 70 bps from a year earlier to hit 16.8%. Overall, there is still more slack capacity in the suburban submarkets, for while

the current 16.8% is far better than the 18.7% level seen in 2010, it is still higher than the 16.1% average recorded since 1988. CBD vacancy

rates, by contrast, are now below the long-term average of 12.8%. The increasing pace of suburban vacancy declines and the slack capacity that

still exists provide an opportunity for investors looking to generate additional income by taking on the leasing risks of office assets in suburban

submarkets.

Industrial availability was at 12.0% nationally at mid-year 2013. This level is well above the long-term average availability rate of 10%. While

these figures suggest a fair amount of slack capacity in the industrial markets, average asking rents are actually rising, having posted a 4.4%

increase over the year-earlier period. One of the issues influencing the availability rate is the significant amount of functionally obsolete space built

into the overall availability figure.

Some markets are outperforming on the income side: Key distribution hubs like the Inland Empire and Dallas have seen annual growth in asking

rents of 12.1% and 11.5%, respectively. Meanwhile, metro areas where the industrial market is focused on the high-tech sector such as San

Francisco and San Jose have seen asking-rent growth in excess of 7%.

The retail sector has lagged other property types throughout the recovery period. However, retail leasing is now catching up with other property

sectors, and availability rates are down 60 bps from a year earlier, having fallen to 12.3% by mid-year 2013. This improvement has come about

despite a fairly weak recovery in demand; net absorption in the first half of 2013 averaged roughly 67% of the peak levels seen from 2005 to

2007. Still, while demand remains tepid, the growth in supply has been even weaker—only 8% of the 2005-to-2007 levels.


IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


7

<< | >>

When reviewing the income potential of the retail sector, the results of our Cap Rate Survey suggest two patterns in investor behavior. Surprisingly,

the markets with the largest inventory have the lowest cap rates. Chicago, Houston, Atlanta and Los Angeles have cap rates ranging from 5.8% to

6.1% 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 a few gateway markets posting lower cap rates, even if they are smaller than other major markets. Boston,

Miami and Seattle have stabilized Class A cap rates for neighborhood centers below 6%, while San Francisco has a 4.9% cap rate.

Multi-housing continues to enjoy the healthiest fundamentals among the main property sectors. Vacancy stood at 5.0% at mid-year 2013, down

from 5.2% a year earlier. The long-term average vacancy rate for the sector is anywhere between 5% and 6%, and as demand continues to

grow, rents are climbing as well, albeit at a slower pace. Effective market rents are up 3.1% from a year earlier, but rents were up nearly 5% in

2011. Renters can absorb only so much of a rent increase. Still, while rents are not growing as quickly as they had in the past, cap rates for the

multi-housing sector are the lowest among the major property sectors. For Class A stabilized assets in urban locations, cap rates came in at 3.5%

for mid-year 2013 in Los Angeles and 3.9% in San Diego. Suburban assets in markets like San Francisco, San Diego, Los Angeles and Orange

County have stabilized Class A cap rates below 4.5%.

In the hotel sector the revenue per available room (RevPAR) continued to grow in the first half of 2013. In the full-service segment, RevPAR was up

5.6% from a year earlier, while the limited-service sector was up 7.0% from mid-year 2012. This pace of RevPAR growth is down somewhat since

the start of the economic recovery in 2010. In the limited-service sector, for instance, the average pace of annual RevPAR growth from the middle

of 2010 through the middle of 2012 was 9.0%. The supply of rooms was fairly constrained during that time frame, however. The CBRE Cap Rate

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

7.3% cap rate across markets. The economy segments have an average cap rate of 9.8%, though the range is fairly wide, with markets falling

anywhere from 8.5% to 11.3% on the spectrum.


IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


8

<< | >>Office | Overview

Investment volume in the office sector in the 12 months ending at mid-year 2013 was up 27% compared to the year-earlier period, with total

volume of $88 billion, according to Real Capital Analytics (RCA). To put this figure into perspective, office transaction volume averaged about

$76 billion per year from 2003 to 2005. Volume is still down from the average pace of $176 billion per year recorded in 2006 and 2007, but

those figures represented an artificial high. Suburban submarkets accounted for about 50% of the volume during the past 12 months. This shift is

significant, as that segment has seen sales grow at a slower pace in the early stages of the economic recovery when investors were mostly focused

on CBD office investments.

The CBRE Cap Rate Survey provides insight into how these trends will evolve over the next six months. CBRE Capital Markets and Valuation

professionals expect that across the 40 suburban markets surveyed, cap rates for stabilized Class A assets will remain flat or increase in 33

markets over the next six months. In CBD submarkets, the same basic pattern is in place, with cap rates expected to be flat or expand over the next

six months in 35 of the 41 markets surveyed.

CLICK TO DOWNLOAD

Select from the list below to access the current CBD office key ratios, forecast and interactive map.

Download a Complete Office CBD Current Key Ratios Chart (PDF)

Download a Complete Office CBD Current Forecast Chart (PDF)

Download the Complete Office CBD Current Key Ratios Map (Interactive PDF)

Select from the list below to access the current suburban office key ratios, forecast and interactive map.

Download a Complete Office Suburban Current Key Ratios Chart (PDF)

Download a Complete Office Suburban Current Forecast Chart (PDF)

Download the Complete Office Suburban Current Key Ratios Map (Interactive PDF)

NEW

NEW

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


9

<< | >>Office CBD | Eastern Region

* Compared to 2nd half 2012

Decrease

Remain Flat

Increase

Class A Class B Class CStabilized Cap Rates Trend* Return on Cost

for Value-AddStabilized Cap Rates Trend* Return on Cost


for Value-AddBaltimore 6.00% - 6.50%

�

7.00% - 7.50% 8.50% - 9.25% 9.00% - 10.00% 9.50% - 11.00%

�

12.00% +Boston 4.50% - 5.50% 5.50% - 6.00% 5.50% - 6.00% 6.25% - 7.00% 7.00% - 7.50% � 7.75% - 8.50%Charlotte 6.50% - 6.75% 8.00% - 8.25% 7.25% - 7.50% 9.00% - 9.25% 8.00% - 8.25%

�

10.00% - 10.25%New York 4.50% 5.50% 5.50% 6.00% N/A N/A N/APhiladelphia 7.00% - 7.50% 7.50% - 8.25% 8.50% - 9.00% 9.00% - 9.50% 9.00% - 9.50% 9.50% - 10.00%Pittsburgh 7.50% - 8.00% � 8.25% - 8.75% 8.50% - 9.00% 9.25% - 9.75% 11.00% - 11.50% � 11.00% - 12.00%Raleigh 6.75% - 7.50% 7.50% - 8.25% 7.75% - 8.50%

�

8.25% - 8.75% 8.50% - 9.25%

�

8.75% - 9.50%Washington, DC 4.50% - 5.25%

�

6.00% - 7.00% 5.50% - 6.25%

�

7.00% - 8.00% 7.50% - 8.50% � 8.50% - 10.00%

FORECAST TRENDS*

Class A Class B Class CStabilized Cap Rates






BaltimoreBostonCharlotteNew York N/A N/APhiladelphiaPittsburghRaleighWashington, DC

* Forecast trends represent the CBRE professionals’ opinion on where ratios are likely to trend in 2nd half of 2013 in their local market.

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


10

<< | >>Office CBD | Midwestern Region

Decrease

Remain Flat

Increase





for Value-Add

FORECAST TRENDS*







ChicagoCincinnatiClevelandColumbusDetroitIndianapolisKansas CityMinneapolisSt. Louis


Chicago 5.75% - 6.25% 8.00% - 9.50% 7.00% - 7.75% 8.50% - 10.00% 8.50% - 9.50% � 9.50% - 11.50%Cincinnati 7.50% - 8.50%

�

8.50% - 9.50% 9.00% - 9.50%

�

10.00% - 10.50% 10.00% - 10.50%

�

11.50% - 12.00%Cleveland 9.00% - 9.50% N/A N/A N/A N/A 10.00% - 11.00% N/A N/A 11.00% - 12.00%Columbus 7.50% - 8.50% � 9.00% - 9.75% 8.50% - 9.50% 9.75% - 10.75% 10.00% - 11.50%

�

11.00% - 12.00%Detroit 9.00% - 10.00% 9.50% - 12.00% 10.00% - 12.00% 10.00% - 14.00% 12.00% - 14.00% 12.00% - 15.00%Indianapolis 8.00% - 8.50% 8.50% - 9.00% 9.50% - 10.50% � 10.00% - 11.00% 12.00% - 13.00% � 14.00% +Kansas City 8.25% - 8.75% 9.25% - 9.75% 9.50% - 10.50% 10.50% - 11.50% 11.00% - 12.00% 12.00% +Minneapolis 6.50% - 7.50% 7.50% - 8.50% 8.00% - 9.00%

�

8.50% - 9.50% 10.00% - 11.00% 12.00% - 13.00%St. Louis 8.50% - 9.50%

�

9.00% - 10.00% 9.50% - 10.50%

�

10.00% - 11.00% 10.50% - 12.00%

�

11.00% - 15.00%

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


11

<< | >>Office CBD | Southern Region




for Value-AddAtlanta 6.50% - 7.50% 7.50% - 8.50% 7.50% - 8.50% 9.00% - 9.50% 8.50% - 10.00% 9.50% - 11.50%Austin 5.50% - 6.25% 6.50% - 7.00% 7.00% - 7.50% 7.50% - 8.00% 7.75% - 8.50%

�

8.25% - 8.75%Dallas 6.00% - 7.50% 6.00% - 8.00% 8.00% - 9.00% 8.00% - 10.00% 9.00% - 11.00%

�

10.00% - 12.00%Houston 5.00% - 6.50% 6.50% - 7.00% 6.50% - 7.50%

�

7.50% - 8.50% 9.00% 10.00%Jacksonville 8.00% - 8.50% 8.50% - 9.00% 9.00% - 9.50%

�

9.50% - 10.50% 10.50% - 11.00% 11.00% - 12.50%Memphis 8.50% - 9.00% 9.00% - 10.00% 9.00% - 10.00% 10.00% - 11.00% 11.00% - 12.00% 12.00% +Miami 5.50% - 6.25% 6.50% - 7.50% 6.25% - 7.00% 6.75% - 7.75% 7.00% - 7.50% 7.50% - 8.50%Nashville 6.50% - 7.00% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50% 9.00% - 9.50% 10.00% - 10.50%Orlando 7.00% - 7.50% � 7.50% - 8.00% 7.50% - 8.50% 8.00% - 9.00% 8.00% - 9.00%

�

9.00% - 10.00%San Antonio 6.50% - 7.00%

�

7.00% - 7.50% 8.00% - 8.75% 8.75% - 9.25% 10.00% - 11.00% 11.00% - 12.00%Tampa 6.50% - 7.50% 7.50% - 8.50% 8.00% - 9.25% 8.75% - 9.75% 9.25% - 10.25% 9.75% - 10.75%


Decrease

Remain Flat

Increase


FORECAST TRENDS*







AtlantaAustinDallasHoustonJacksonvilleMemphisMiamiNashvilleOrlandoSan AntonioTampa

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


12

<< | >>Office CBD | Western Region

Decrease

Remain Flat

Increase




for Value-AddAlbuquerque 8.50% - 9.50% � N/A 9.25% - 10.25% � N/A 9.75% - 10.75% N/ADenver 5.50% - 6.00% 6.50% - 7.00% 6.50% - 7.00% 7.50% - 8.00% 8.25% - 8.75% 9.25% - 9.75%Las Vegas 7.00% - 8.00% 8.50% - 9.50% 8.00% - 9.00% 9.50% - 10.50% 9.00% - 10.00% 9.00% - 11.00%Los Angeles 4.50% - 5.00%

�

7.50% - 8.00% 5.50% - 6.00%

�

8.00% - 8.50% 6.50% -7.00%

�

9.00% -10.00%Orange County 5.50% - 6.00%

�

6.50% - 7.25% 6.50% - 7.50%

�

8.00% - 8.75% 8.50% - 9.25%

�

8.75% - 9.75%Phoenix 6.50% - 7.00% 7.00% - 7.50% 7.00% - 8.00% 8.00% - 9.50% 8.00% - 9.00% 9.50% - 11.00%Portland 6.25% - 7.25% 6.75% - 7.75% 7.00% - 8.00% 7.50% - 8.50% 8.00% - 9.00% 8.50% - 10.00%Sacramento 6.75% - 7.50%

�

7.50% - 8.00% 7.50% - 8.00%

�

8.00% - 9.00% 8.00% - 9.00%

�

9.00% - 10.00%Salt Lake City 7.25% - 7.75% 7.75% - 8.25% 7.50% - 8.00% 8.00% - 8.50% 8.50% - 9.50% 8.00% - 9.00%San Diego 6.75% - 7.25% � 7.00% - 7.50% 7.00% - 7.50% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50%San Francisco 3.00% - 4.50% 5.50% - 6.00% 4.00% - 6.00% 6.50% - 7.50% 6.75% - 7.25% 7.25% - 8.00%San Jose 6.50% - 7.50% 7.00% - 8.00% 7.00% - 8.00% 7.50% - 8.50% 8.00% - 10.00% � 9.00% - 12.00%Seattle 5.00% - 5.75% 6.00% - 6.50% 5.75% - 6.50% 7.00% - 8.00% 7.50% - 8.50% 8.50% - 10.00%



FORECAST TRENDS*







AlbuquerqueDenverLas VegasLos AngelesOrange CountyPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan FranciscoSan JoseSeattle

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


13

<< | >>Office Suburban | Eastern Region





for Value-AddBaltimore 6.75% - 7.25% 7.00% - 8.00% 8.00% - 9.00%

�

9.00% - 10.00% 9.50% - 11.00% 12.00% +Boston 5.75% - 6.25% 6.25% - 7.50% 6.75% - 7.75% � 7.50% - 8.25% 8.00% - 9.00% � 9.00% - 11.00%Charlotte 6.75% - 7.00%

�

9.00% - 9.25% 7.50% - 7.75%

�

10.00% - 10.25% 8.50% - 8.75%

�

11.00% - 11.25%Philadelphia 7.25% - 7.75% 8.00% - 9.00% 8.50% - 9.00% 9.50% - 10.00% 9.00% - 9.50%

�

10.00% - 10.50%Pittsburgh 8.00% - 8.50% � 8.50% - 9.00% 8.75% - 9.25% 9.50% - 10.00% 11.00% - 12.00% � 11.00% - 12.00%Raleigh 7.75% - 8.25% � 7.75% - 8.75% 8.25% - 8.75% 8.50% - 9.50% 8.50% - 9.25%

�

9.50% - 10.00%Washington, DC 6.00% - 6.50% 7.00% - 8.00% 7.00% - 7.50% 8.50% - 9.50% 9.00% - 10.00% 10.00% - 11.00%

Decrease

Remain Flat

Increase

FORECAST TRENDS*







BaltimoreBostonCharlottePhiladelphiaPittsburghRaleighWashington, DC


IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


14

<< | >>Office Suburban | Midwestern Region

Decrease

Remain Flat

Increase





for Value-Add

FORECAST TRENDS*









Chicago 7.00% - 8.50% 9.00% - 10.50% 8.25% - 10.50% � 11.00% - 13.25% 10.75% - 12.50%

�

13.00% - 15.50%Cincinnati 8.00% - 8.50% 9.50% - 10.00% 9.00% - 9.50% 10.00% - 10.50% 10.00% - 10.50%

�

11.00% - 12.50%Cleveland 8.00% - 9.00% N/A N/A N/A N/A 10.00% - 11.00% N/A N/A 11.00% - 12.00%Columbus 8.00% - 9.00% � 9.00% - 9.75% 9.00% - 10.00% 9.75% - 10.75% 10.75% - 11.75% 11.00% - 12.00%Detroit 8.75% - 10.00% 9.50% - 12.00% 9.50% - 12.00% 10.00% - 14.00% 10.00% - 14.00% 12.00% - 15.00%Indianapolis 8.50% - 9.00% 9.00% - 9.50% 9.50% - 10.50% � 10.00% - 11.00% 12.00% - 13.00% � 14.00% +Kansas City 7.25% - 7.75% 8.00% - 8.75% 8.50% - 9.50% 9.50% - 10.50% 10.00% - 11.00% 12.00% - 14.00%Minneapolis 6.50% - 7.50%

�

8.00% - 9.00% 8.75% - 9.75% 9.50% - 10.50% 10.00% - 12.00% 12.00% - 13.00%St. Louis 7.50% - 8.50%

�

8.00% - 9.00% 9.00% - 10.00% 9.50% - 10.50% 10.00% - 12.00% 11.00% - 13.00%

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<< | >>Office Suburban | Southern Region




for Value-AddAtlanta 7.00% - 8.00% � 8.00% - 9.00% 7.50% - 8.50% 9.00% - 10.00% 9.00% - 10.50% 10.00% - 12.00%Austin 6.00% - 6.50%

�

7.00% - 7.50% 7.50% - 8.00% 8.00% - 8.50% 7.75% - 8.25%

�

8.25% - 8.75%Dallas 6.25% - 7.75% 7.00% - 8.00% 7.50% - 8.50% 8.00% - 9.00% 8.75% - 10.50% 10.00% - 12.00%Houston 6.00% - 6.50% 7.00% - 7.50% 7.00% - 8.00%

�

7.50% - 8.50% 8.50% - 9.50% 10.00% - 12.00%Jacksonville 7.50% - 8.50% 8.00% - 9.00% 9.00% - 10.00% 10.00% - 11.00% 10.50% 12.00% +Memphis 7.50% - 8.00% 8.25% - 8.75% 8.00% - 9.00%

�

8.50% - 9.50% 9.00% - 10.00% 11.00% - 12.00%Miami 6.50% - 7.25% 7.25% - 8.25% 7.25% - 8.50% 8.25% - 9.50% 8.00% - 9.00% 9.00% - 11.00%Nashville 6.50% - 7.50% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50% 9.00% - 10.00%

�

10.00% - 10.50%Orlando 8.00% - 8.50% 8.75% - 9.25% 9.00% - 10.00% � 10.00% - 11.00% 10.00% - 12.00% � 12.00% - 14.00%San Antonio 7.00% - 7.75% 7.75% - 8.50% 8.25% - 8.75% 9.00% - 9.50% 10.00% - 11.00% 11.00% - 12.00%Tampa 7.00% - 8.00% 8.00% - 8.50% 8.50% - 9.00% 9.00% - 9.50% 9.50% - 10.50% 10.00% - 12.00%


Decrease

Remain Flat

Increase


FORECAST TRENDS*








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<< | >>Office Suburban | Western Region

Decrease

Remain Flat

Increase




for Value-AddAlbuquerque 8.00% - 9.00% N/A 9.00% - 10.00% � N/A 9.00% - 11.00% N/ADenver 7.00% - 7.50% � 7.50% - 8.00% 7.50% - 8.00% 8.50% - 9.00% 9.00% - 9.50%

�

11.25% - 11.75%Las Vegas 7.00% - 8.00% 8.50% - 9.50% 8.00% - 9.00% 9.50% - 10.50% 9.00% - 10.00% 9.00% - 11.00%Los Angeles 4.50% - 5.00%

�

7.00% - 7.50% 5.50% - 6.50%

�

7.50% - 8.50% 6.50% - 7.50%

�

8.50% - 9.50%Orange County 5.50% - 6.00%

�

6.50% - 7.25% 6.50% - 7.50%

�

8.00% - 8.75% 8.50% - 9.25%

�

8.75% - 9.75%Phoenix 6.50% - 7.00% 7.25% - 8.00% 7.00% - 8.00% 8.00% - 9.00% 9.50% - 10.50%

�

11.00% - 13.00%Portland 7.25% - 8.25% 7.75% - 8.75% 8.00% - 9.00% 8.50% - 9.50% 8.75% - 9.75% 8.50% - 10.75%Sacramento 7.00% - 8.00%

�

7.75% - 8.75% 8.00% - 9.00%

�

8.75% - 9.75% 9.00% - 10.00%

�

9.75% - 11.00%Salt Lake City 7.25% - 7.75% 7.75% - 8.25% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 10.00% � 10.00% - 12.00%San Diego 6.25% - 6.75% � 6.50% - 7.00% 7.00% - 7.50% 7.50% - 8.00% 7.75% - 8.25% 8.25% - 8.75%San Francisco 5.00% - 7.00%

�

6.50% - 7.50% 6.75% - 7.50% 7.00% - 8.00% 7.50% - 9.00% � 8.00% - 10.00%San Jose 7.00% - 8.00% 7.50% - 8.50% 7.50% - 8.50% 8.00% - 9.00% 8.00% - 10.00% � 9.00% - 12.00%Seattle 6.00% - 6.50% 6.50% - 7.50% 6.50% - 7.25% 7.50% - 8.50% 7.50% - 8.50% 9.00% - 10.00%



FORECAST TRENDS*







AlbuquerqueDenverLas VegasLos AngelesOrange CountyPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan FranciscoSan JoseSeattle

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<< | >>Multi-housing | Overview

Among all sectors of commercial real estate investment, multi-housing saw the earliest turnaround in investor interest, as the positive trends in income fundamentals seen over the past 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 boost to market liquidity as well. Multi-housing transaction volume for the 12 months ended June 30, 2013 totaled $104 billion, according to RCA. While this figure is still off from the high-water mark of $105.6 billion recorded in 2007, considering the recent pace of growth it is not quite so far from the peak. If transaction velocity continues at the same pace through the second half of the year, the market could see $133 billion in transaction activity for 2013—and set a new high.

CBRE Capital Markets and Valuation professionals expect that, of the 40 markets surveyed, only seven will experience compression in cap rates for Class A stabilized assets in infill locations over the next six months. With the exception of Dallas, the markets where further compression is expected are secondary and tertiary markets. That said, 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 flat or increase in virtually all suburban submarkets.

CLICK TO DOWNLOAD

Select from the list below to access the current multi-housing infill/urban key ratios, forecast and interactive map.

Download a Complete Multi-housing Infill/Urban Current Key Ratios Chart (PDF)

Download a Complete Multi-housing Infill/Urban Current Forecast Chart (PDF)

Download the Complete Multi-housing Infill/Urban Current Key Ratios Map (Interactive PDF)

Select from the list below to access the current multi-housing suburban key ratios, forecast and interactive map.

Download a Complete Multi-housing Suburban Current Key Ratios Chart (PDF)

Download a Complete Multi-housing Suburban Current Forecast Chart (PDF)

Download the Complete Multi-housing Suburban Current Key Ratios Map (Interactive PDF)

NEW

NEW

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<< | >>Multi-housing Infill/Urban | Eastern Region

Class A Class B Class C

Stabilized Cap Rates Trend* Return on Cost



for Value-AddBaltimore 4.50% - 5.00% 5.00% - 5.50% 5.00% - 5.50%

�

5.50% - 6.00% 5.50% - 6.00%

�

5.75% - 6.00%Boston 4.00% - 4.50% 4.75% - 5.25% 4.75% - 5.00% 5.50% - 6.00% 5.00% - 5.50% N/A 5.75% - 6.25%Charlotte 4.75% - 5.25% 5.25% - 5.75% 5.50% - 6.00% 5.75% - 6.25% 6.50% - 7.00%

�

6.75% - 7.25%New York 4.00% - 4.50% 5.00% - 5.50% 4.50% - 5.00% 5.50% - 6.00% 5.00% - 6.00% 6.00% - 7.00%Philadelphia 5.00% - 5.25% 5.50% - 6.00% 6.25% - 6.75% 6.50% - 7.00% 7.00% - 7.50% 7.25% - 7.75%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% - 5.25% 6.25% - 6.75% 5.25% - 5.75%

�

N/A N/A N/A N/AWashington, DC 4.00% - 4.50% N/A 5.25%

�

5.50% N/A N/A 5.50%

* Compared to 2nd Half 2012

Decrease

Remain Flat

Increase

FORECAST TRENDS*








BaltimoreBostonCharlotteNew YorkPhiladelphiaPittsburghRaleighWashington, DC


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<< | >>Multi-housing Infill/Urban | Midwestern Region

Chicago 4.25% - 4.75% 4.50% - 5.00% 5.00% - 5.25% 5.50% - 6.00% 5.50% - 6.00% 5.75% - 6.25%Cincinnati 5.50% - 6.00% 6.50% - 7.00% 6.75% - 7.25% 7.25% - 7.75% 8.25% - 8.75% 8.75% - 9.25%Cleveland 6.50% - 7.00%

�

N/A N/A N/A N/A N/A N/A N/AColumbus 6.25% - 6.75% 6.50% - 7.00% 7.25% - 7.75% 7.50% - 8.00% 8.50% - 9.00% 9.00% - 9.50%Detroit 6.75% - 7.75% 7.00% - 7.50% 7.50% - 8.50% 7.75% - 8.50% 8.75% - 10.00% 8.75% - 10.50%Indianapolis 5.50% - 6.00% 6.00% - 6.50% 6.00% - 6.50% 6.50% - 7.00% 6.75% - 7.25%

�

7.75% - 8.25%Kansas City N/A N/A N/A 6.00% - 6.25% N/A N/A N/A N/A N/AMinneapolis 4.75% - 5.25%

�

5.25% - 5.50% 5.75% - 6.25% 6.00% - 6.50% 6.75% - 7.25%

�

7.00% - 7.50%St. Louis 5.25% - 6.00% N/A 6.10% - 7.00% N/A 8.00% - 9.50% N/A





for Value-Add


FORECAST TRENDS*








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Increase



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<< | >>Multi-housing Infill/Urban | Southern Region





for Value-AddAtlanta 5.00% - 5.50% 5.50% - 6.00% 5.50% - 6.00% 6.25% - 6.75% 7.25% - 7.75% 8.00% - 8.50%Austin 4.25% - 4.75% 4.50% - 5.00% 4.50% - 5.00%

�

4.75% - 5.25% 4.75% - 5.25%

�

5.00% - 5.50%Dallas 4.75% - 5.50% � N/A 6.25% - 7.00% N/A 7.25% - 8.00% N/AHouston 4.50% - 5.00% 4.75% - 5.25% 6.00% - 6.50% 6.25% - 6.75% 7.00% - 7.50% 7.25% - 7.75%Jacksonville 5.25% - 5.75% 6.00% - 6.50% 6.00% - 6.50% N/A 6.75% - 7.25% N/AMemphis 5.75% - 6.25% 6.25% - 6.75% 6.25% - 7.00% 6.50% - 7.00% 8.00% - 9.00% 8.50% - 9.00%Miami 4.00% - 5.15% 4.50% - 5.00% 4.50% - 6.25% 4.75% - 6.50% 6.00% - 8.50% � 6.75% - 8.75%Nashville 5.00% - 5.50% 5.50% - 6.00% 6.00% - 6.50% 6.25% - 6.75% 6.75% - 7.25% 7.25% - 7.75%Oklahoma City 6.25% N/A 7.00% N/A 9.00% N/AOrlando 5.00% - 5.50% 5.25% - 5.75% 6.00% - 6.50% 6.25% - 6.75% 6.75% - 7.25% 7.00% - 7.50%San Antonio 5.50% - 5.75% N/A 6.00% - 6.50% 6.25% - 6.75% 6.50% - 7.00%

�

6.75% - 7.25%Tampa 4.75% - 5.25% 5.00% - 5.50% 5.50% - 6.00% 6.25% - 6.75% 6.25% - 6.75% 6.75% - 7.25%

Decrease

Remain Flat

Increase

FORECAST TRENDS*









AtlantaAustinDallasHoustonJacksonvilleMemphisMiamiNashvilleOklahoma City N/A N/A N/AOrlandoSan AntonioTampa


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<< | >>Multi-housing Infill/Urban | Western Region

Decrease

Remain Flat

Increase

Albuquerque 6.00% - 6.50% 6.25% - 6.75% 6.50% - 7.00% 6.75% - 7.25% 7.00% - 7.50% 7.25% - 7.75%Denver 4.75% - 5.25% 5.50% - 5.75% 5.25% - 5.75% 5.50% - 6.00% 5.75% - 6.25%

�

7.00% - 7.50%Inland Empire 4.75% - 5.25% 5.25% - 5.75% 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00%Los Angeles 3.25% - 3.75%

�

4.75% - 5.00% 3.50% - 4.00%

�

4.75% - 5.00% 5.50% - 6.00% � N/APhoenix 4.75% - 5.00% 5.75% - 6.00% 5.25% - 5.75% 6.25% - 6.75% 6.00% - 6.50% 7.00% - 7.50%Portland 4.50% - 5.00% 4.75% - 5.25% 4.75% - 5.25%

�

5.25% - 5.75% 5.50% - 6.00% 6.00% - 6.50%Sacramento 4.75% - 5.25% 5.25% - 5.75% 5.25% - 5.75% 5.50% - 6.00% 6.00% - 6.50% 6.50% - 7.00%Salt Lake City 5.50% - 6.00% 5.75% - 6.25% 5.75% - 6.25% 6.00% - 6.25% 6.00% - 7.00% 6.25% - 7.00%San Diego 3.65% - 4.15% 4.25% - 4.75% 4.50% - 5.00% 5.00% - 5.50% 5.75% - 6.25% 6.00% - 6.50%San Francisco Bay Area 3.75% - 4.25% 5.00% - 5.50% 3.75% - 4.25%

�

5.25% - 5.75% 4.00% - 4.50%

�

6.00% - 6.50%

Seattle 4.00% - 4.50% 4.50% - 5.00% 4.75% - 5.25% 5.00% - 5.50% 5.25% - 5.75% 5.75% - 6.25%





for Value-Add

FORECAST TRENDS*








AlbuquerqueDenverInland EmpireLos AngelesPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan Francisco Bay AreaSeattle



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<< | >>Multi-housing Suburban | Eastern Region





for Value-AddBaltimore 5.25% - 5.50% � N/A 5.75% - 6.25% 6.00% - 6.50% N/A N/A 6.25% - 6.75%Boston 4.50% - 5.25% 5.00% - 5.50% 5.25% - 5.75% 6.00% - 6.50% 6.50% - 7.00% 7.25% - 7.75%Charlotte 5.25% - 5.75% 5.50% - 6.00% 5.75% - 6.25% 6.00% - 6.50% 6.75% - 7.25% 7.00% - 7.50%Philadelphia 5.00% - 5.25% 5.75% - 6.25% 6.25% - 6.75% 6.75% - 7.25% 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 5.00% - 5.50% 7.25% - 7.75% 5.50% - 6.00%

�

N/A 6.50% - 7.00%

�

N/AWashington, DC 5.10% � N/A 5.50% 5.75% N/A N/A 6.00%

Decrease

Remain Flat

Increase

FORECAST TRENDS*








BaltimoreBostonCharlottePhiladelphiaNew YorkPittsburghRaleighWashington, DC



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<< | >>Multi-housing Suburban | Midwestern Region

Chicago 5.50% - 6.00% � 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75% 7.00% - 7.50% 7.25% - 7.75%Cincinnati 6.00% - 6.50% 6.75% - 7.25% 7.25% - 7.75% 8.00% - 8.50% 8.50% - 9.00% � 9.00% - 9.50%Cleveland 7.00% - 7.50% N/A 7.25% - 7.75%

�

N/A 8.00% - 9.50% 10.00% - 10.50%Columbus 6.25% - 6.75% 6.50% - 7.00% 7.25% - 7.75% 7.50% - 8.00% 8.50% - 9.00% 9.00% - 9.50%Detroit 6.75% - 7.75% 7.25% - 8.00% 7.50% - 8.50% 8.25% - 8.75% 8.75% - 10.00% 8.75% - 10.50%Indianapolis 5.75% - 6.25% 6.25% - 6.75% 6.25% - 6.75% 6.75% - 7.25% 7.50% - 8.00% 8.00% - 8.50%Kansas City 5.50% - 6.00%

�

6.00% - 6.50% 6.00% - 6.50%

�

6.75% - 7.25% 7.50% - 8.00%

�

8.50% - 9.00%Minneapolis 5.25% - 5.75% 5.75% - 6.00% 6.00% - 6.50% 6.50% - 7.00% 7.25% - 7.75%

�

7.00% - 7.50%St. Louis 5.50% - 6.25% N/A 6.30% - 7.00% N/A 8.00% - 9.50% N/A





for Value-Add

Decrease

Remain Flat

Increase


FORECAST TRENDS*










IN THIS ISSUE:

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Appendix


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<< | >>Multi-housing Suburban | Southern Region





for Value-AddAtlanta 5.50% - 6.00% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00% 7.25% - 8.00% 8.25% - 8.75%Austin 5.00% - 5.50% 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75% 6.50% - 7.00%Dallas 5.25% - 6.00%

�

N/A 6.25% - 7.25% N/A 7.25% - 8.25% N/AHouston 5.50% - 6.00%

�

5.75% - 6.25% 6.50% - 7.00%

�

6.75% - 7.25% 7.50% - 8.00%

�

8.00% - 8.50%Jacksonville 5.50% - 6.00% � 6.50% - 7.00% 6.25% - 6.75% � N/A 7.00% + N/AMemphis 5.75% - 6.50% 6.50% - 7.00% 6.75% - 7.50% 7.00% - 7.75% 7.50% - 10.00%

�

8.75% - 10.00%Miami 4.00% - 5.15% 4.75% - 5.25% 4.75% - 6.25% 5.00% - 6.75% 6.00% - 8.50% 7.00% - 9.00%Nashville 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00% 7.00% - 7.50% 7.50% - 8.00%Oklahoma City 6.50% � N/A 7.25% N/A 9.00% N/AOrlando 5.00% - 5.50% N/A 5.25% - 5.75% 6.25% - 6.75% N/A 6.50% - 7.00% 7.00% - 7.50% N/A 7.25% - 7.75%San Antonio 5.50% - 5.75% N/A 6.00% - 6.50%

�

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

Decrease

Remain Flat

Increase

FORECAST TRENDS*








AtlantaAustinDallasHoustonJacksonvilleMemphisMiamiNashvilleOklahoma City N/A N/A N/AOrlandoSan AntonioTampa



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<< | >>Multi-housing Suburban | Western Region





for Value-AddAlbuquerque 6.00% - 6.75% 6.25% - 6.75% 6.50% - 7.25% 6.75% - 7.25% 7.00% - 7.75% 7.25% - 7.75%Denver 5.13% - 5.63% 5.50% - 6.00% 5.50% - 6.00% 5.75% - 6.25% 6.13% - 6.63%

�

7.25% - 7.75%Inland Empire 5.00% - 5.50% 5.50% - 6.00% 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50% 6.50% - 7.00%Las Vegas 5.25% - 5.75% 5.50% - 6.00% 6.00% - 6.50% 6.25% - 6.75% 7.00% - 7.50% 7.25% - 7.75%Los Angeles 3.75% - 4.25% 5.00% - 5.25% 4.50% - 5.00% 5.00% - 5.25% 5.75% - 6.25% � N/AOrange County 3.75% - 4.25% N/A 4.75% - 5.25% � 5.25% - 5.75% 5.75% - 6.25% 6.00% - 6.50%Phoenix 5.00% - 5.50% 6.00% - 6.50% 5.25% - 5.75% 6.25% - 6.75% 6.00% - 6.50% 7.00% - 7.50%Portland 5.25% - 5.75% � 5.50% - 6.00% 5.50% - 6.00% 5.75% - 6.25% 6.00% - 6.50% 6.25% - 6.75%Sacramento 5.00% - 5.50% 5.50% - 6.00% 5.50% - 6.00% 6.00% - 6.50% 6.25% - 6.75%

�

6.75% - 7.25%Salt Lake City 5.50% - 6.00% 5.75% - 6.25% 5.75% - 6.25% 6.00% - 6.25% 6.00% - 7.00% � 6.25% - 7.00%San Diego 4.00% - 4.50% 4.50% - 5.00% 5.00% - 5.50% 5.50% - 6.00% 5.75% - 6.25% 6.00% - 6.50%San Francisco Bay Area 4.00% - 4.50% 5.75% - 6.25% 4.50% - 5.00%

�

6.00% - 6.50% 5.00% - 5.50%

�

6.50% - 7.00%Seattle 4.50% - 5.25% � 4.75% - 5.25% 5.00% - 5.50% 5.25% - 5.75% 6.00% - 6.50% 6.00% - 6.50%

Decrease

Remain Flat

Increase


FORECAST TRENDS*








AlbuquerqueDenverInland EmpireLas VegasLos AngelesOrange CountyPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan Francisco Bay AreaSeattle


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26

<< | >>

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 2013, sales volume reached $52.9 billion, up from the $46.2 billion pace set during the previous 12 months.

This 14.6% increase for retail overall is generally reflected in the trends seen among retail subtypes: Sales volume for strip-center retail was

up 16.5% from a year earlier, hitting $22.4 billion in the 12 months through mid-year 2013. The mall segment saw volume of $30.6 billion

during the same period, up 13.3% from a year earlier.

Our survey results suggest that the cap rate compression that began in mid-2010 in the retail sector is now largely over. For Class A stabilized

neighborhood center assets, CBRE professionals expect that in the next six months cap rates will remain flat or increase in 34 of the 39

markets surveyed. The same patterns are seen in the power center subtypes. As one moves up the risk spectrum to lower-grade assets, cap rate

compression is expected to dwindle in virtually all markets.

CLICK TO DOWNLOAD

Select from the list below to access the current neighborhood/community center (grocery anchored) retail key ratios, forecast and interactive map.

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

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

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

Select from the list below to access the current power center retail key ratios, forecast and interactive map.

Download a Complete Retail Power Center Current Key Ratios Chart (PDF)

Download a Complete Retail Power Center Current Forecast Chart (PDF)

Download the Complete Retail Power Center Current Key Ratios Map (Interactive PDF)

Select from the list below to access the current high street retail key ratios, forecast and interactive map.

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

Download the Complete High Street Retail Current Key Ratios Map (Interactive PDF)

NEW

NEW

NEW

Retail | Overview

IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


27

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





for Value-AddBaltimore 5.50% - 6.50% 7.00% - 8.00% 7.00% - 8.00% � 8.00% - 9.00% 8.00% - 9.50% � 9.50% - 12.00%Boston 5.50% - 6.25% 6.50% - 7.50% 6.75% - 7.75% 7.50% - 8.50% 8.50% - 11.00% � 10.00% +Charlotte 6.25% - 6.75%

�

6.75% - 7.25% 7.25% - 7.75%

�

8.00% - 8.75% 8.00% - 9.50%

�

8.50% - 9.50%Philadelphia 7.00% - 7.25% 7.00% - 7.50% 8.00% - 8.50% 8.00% - 8.75% 9.00% - 10.50% 9.00% - 12.00%Pittsburgh 6.75% - 7.25% 8.00% - 8.50% 8.00% - 8.50%

�

9.00% - 10.00% 9.50% - 10.50% 11.00% - 12.00%Raleigh 6.25% - 6.75% 6.75% - 7.25% 7.25% - 7.75% 8.00% - 8.75% 8.00% - 9.50% 8.50% - 9.50%Washington, DC 5.50% - 6.50% 7.00% - 8.00% 7.00% - 8.00% � 8.00% - 9.00% 8.00% - 9.50% � 9.50% - 12.00%

Decrease

Remain Flat

Increase

FORECAST TRENDS*











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

Chicago 5.90% - 6.25% 6.50% - 7.00% 6.75% - 7.25%

�

7.50% - 8.00% 7.50% - 8.00%

�

8.50% - 9.00%Cincinnati 6.75% - 7.50%

�

7.75% - 8.75% 8.00% - 8.50%

�

9.00% - 9.75% 9.00% - 10.00% 10.00% - 11.00%Cleveland 6.75% - 7.25%

�

7.00% - 7.50% 7.50% - 8.00%

�

8.00% - 8.50% 8.50% - 9.00%

�

9.00% - 9.50%Columbus 6.75% - 7.25% 7.25% - 8.00% 7.00% - 7.50%

�

7.75% - 8.25% 8.00% - 8.50%

�

8.75% - 9.25%Detroit 7.00% - 7.50% 8.50% - 10.00% 7.50% - 8.50%

�

10.00% - 12.00% 8.50% - 10.00%

�

12.00% - 15.00%Indianapolis 6.25% - 6.50%

�

6.75% - 7.25% 7.00% - 7.50%

�

7.75% - 8.25% 8.00% - 8.50%

�

8.75% - 9.25%Kansas City 6.25% - 6.50%

�

6.75% - 7.25% 7.00% - 7.50%

�

7.75% - 8.25% 8.00% - 8.50%

�

8.75% - 9.25%Minneapolis 6.00% - 6.50% 8.25% - 9.00% 6.50% - 7.00%

�

9.00% - 9.50% 7.00% - 8.00%

�

9.50% - 10.00%St. Louis 6.25% - 6.50%

�

6.75% - 7.25% 7.00% - 7.50%

�

7.75% - 8.25% 8.00% - 8.50%

�

8.75% - 9.25%





for Value-Add

Decrease

Remain Flat

Increase


FORECAST TRENDS*










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

Atlanta 5.75% - 6.50% 7.50% - 8.50% 6.50% - 7.00%

�

8.00% - 9.00% 7.00% - 9.00%

�

9.00% - 10.00%Austin 5.50% - 6.25%

�

6.00% - 6.75% 6.50% - 7.50% 7.00% - 8.00% 7.75% - 9.00%

�

8.25% - 9.50%Dallas 5.75% - 7.00% 8.25% - 8.75% 7.00% - 8.00% 8.75% - 9.25% 8.25% - 9.75% 9.25% - 10.50%Houston 5.50% - 6.50%

�

8.00% - 9.00% 7.00% - 8.00%

�

9.00% - 10.00% 8.50% - 9.50%

�

10.00% - 11.00%Jacksonville 6.50% - 7.00% 8.00% - 9.00% 7.00% - 8.00% 9.00% - 10.00% 9.50% - 10.50% 11.00% - 12.00%Memphis 7.00% - 7.50%

�

8.00% - 8.50% 7.50% - 8.00%

�

8.50% - 9.00% 10.00% - 11.00% 11.00% - 12.00%Miami 5.25% - 6.25% 6.50% - 8.00% 6.00% - 7.25%

�

7.00% - 9.00% 7.50% - 9.00%

�

8.00% - 10.00%Nashville 7.00% - 7.50% 8.00% - 8.50% 8.00% - 8.50% 9.00% - 9.50% 9.00% - 9.50% 10.00% - 10.50%Orlando 6.25% - 6.75%

�

7.00% - 8.00% 6.75% - 7.50%

�

8.00% - 9.00% 8.00% - 11.00% 10.00% +San Antonio 5.75% - 6.50%

�

6.25% - 7.00% 6.50% - 7.50%

�

7.00% - 8.00% 8.50% - 9.50%

�

9.00% - 10.00%Tampa 6.25% - 6.75%

�

7.00% - 8.00% 6.75% - 7.50%

�

8.00% - 9.00% 8.00% - 11.00% 10.00% +





for Value-Add

Decrease

Remain Flat

Increase


FORECAST TRENDS*










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Appendix


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

Denver 6.00% - 6.50%

�

N/A 7.00% - 7.50%

�

8.00% - 8.50% 8.50% - 9.00%

�

9.00% - 9.50%Las Vegas 6.50% - 7.50% 7.00% - 8.00% 7.00% - 8.00% 7.50% - 8.50% 7.50% - 9.00% 9.00% - 11.00%Los Angeles 5.50% - 6.00% 6.50% - 7.00% 6.50% -7.00% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50%Orange County 5.50% - 6.50% 6.50% - 7.50% 6.50% - 7.00% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50%Phoenix 5.75% - 6.25% 6.75% - 7.25% 6.50% - 7.00% 8.00% - 8.50% 8.00% - 9.00% 10.00% - 11.00%Portland 5.50% - 6.50% 7.00% - 8.00% 6.50% - 7.50%

�

8.00% - 9.00% 8.00% - 10.00% 10.00% - 12.00% Sacramento 6.75% - 7.25%

�

7.00% - 8.00% 7.25% - 8.25%

�

8.00% - 9.00% 8.25% - 9.50%

�

9.00% - 11.00%Salt Lake City 7.00% - 7.50%

�

7.50% - 8.00% 7.50% - 8.00%

�

8.00% - 8.50% 8.00% - 9.00%

�

8.50% - 9.50%San Diego 5.50% - 6.50% 6.50% - 7.00% 6.50% - 7.00% 7.50% - 8.00% 8.00% - 8.50% 9.00% - 9.50%San Francisco 4.50% - 5.25% 4.75% - 5.75% 6.00% - 6.75% 6.75% - 7.25% 7.25% - 7.75% 8.00% - 9.50%San Jose 6.00% - 6.75% 5.75% - 6.75% 7.00% - 7.75% 6.75% - 7.75% 7.75% - 9.00% 7.50% - 9.00%Seattle 5.25% - 5.75% 6.00% - 7.50% 6.25% - 7.25%

�

7.00% - 8.50% 7.25% - 7.75%

�

8.00% - 9.50%





for Value-Add

Decrease

Remain Flat

Increase

DenverLas VegasLos AngelesOrange CountyPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan FranciscoSan JoseSeattle

FORECAST TRENDS*










IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

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Appendix


31

<< | >>Retail Power Center | Eastern Region





for Value-AddBaltimore 6.75% - 8.00% 7.50% - 8.50% 7.50% - 8.50% 8.50% - 9.50% 9.00% - 10.00% 10.00% - 12.50%Boston 6.00% - 7.00% 7.50% - 8.50% 7.00% - 7.75%

�

8.00% - 10.00% 8.00% + N/ACharlotte 6.75% - 7.25%

�

7.25% - 7.75% 7.25% - 7.75%

�

7.75% - 8.25% 7.50% - 10.50% 8.50% - 10.50%Philadelphia 7.00% - 7.25% 7.00% - 7.50% 8.00% - 8.50% 8.00% - 8.75% 9.00% - 10.50% 10.00% - 11.00%Pittsburgh 7.75% - 8.25% 9.00% - 9.50% 9.00% - 10.00% 10.00% - 11.00% 11.00% - 12.00% � 12.00% -13.00%Raleigh 6.75% - 7.25% 7.25% - 7.75% 7.25% - 7.75%

�

7.75% - 8.25% 8.50% - 10.50% 10.50% - 12.50%Washington, DC 6.00% - 8.00%

�

7.50% - 8.50% 7.50% - 8.50% 8.50% - 9.50% 9.00% - 10.00% � 10.00% - 12.50%

Decrease

Remain Flat

Increase


FORECAST TRENDS*










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<< | >>Retail Power Center | Midwestern Region

Chicago 6.25% - 6.50% 6.75% - 7.25% 6.75% - 7.25%

�

7.75% - 8.25% 7.50% - 8.00%

�

9.00% - 9.50%Cincinnati 6.75% - 7.50%

�

7.75% - 8.75% 7.50% - 8.00%

�

8.50% - 10.00% 9.00% - 10.00% 10.00% - 11.00%Cleveland 6.75% - 7.25%

�

7.25% - 7.75% 7.50% - 8.00%

�

8.25% - 8.75% 8.25% - 8.75%

�

9.75% - 10.25%Columbus 6.50% - 7.00%

�

7.00% - 7.50% 7.25% - 7.75%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.50% - 10.00%Detroit 7.50% - 8.50% 9.00% - 10.50% 8.50% - 9.50% 10.50% - 12.50% 9.50% - 11.00%

�

12.50% - 15.00%Indianapolis 6.50% - 7.00%

�

7.00% - 7.50% 7.25% - 7.75%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.50% - 10.00%Kansas City 6.50% - 7.00%

�

7.00% - 7.50% 7.25% - 7.75%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.50% - 10.00%Minneapolis 7.00% - 7.50% � 8.50% - 9.25% 7.50% - 8.00%

�

9.00% - 9.75% 8.00% - 8.50%

�

9.50% - 10.00%St. Louis 6.50% - 7.00%

�

7.00% - 7.50% 7.25% - 7.75%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.50% - 10.00%





for Value-Add

Decrease

Remain Flat

Increase


FORECAST TRENDS*










IN THIS ISSUE:

Overview

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Retail

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Appendix


33

<< | >>Retail Power Center | Southern Region

Decrease

Remain Flat

Increase





for Value-AddAtlanta 6.75% - 7.50%

�

7.50% - 8.50% 7.50% - 8.50%

�

8.00% - 9.00% 8.50% - 10.00%

�

9.00% - 10.00%Austin 6.75% - 7.25% � 7.25% - 7.75% 7.25% - 8.25%

�

7.75% - 8.75% 8.50% - 9.25%

�

9.00% - 9.75%Dallas 7.00% - 7.50% � 8.00% - 8.50% 8.00% - 8.75% 8.50% - 9.00% 9.75% 9.50% - 10.50%Houston 6.50% - 7.00% 9.00% - 10.00% 7.00% - 8.75%

�

9.50% - 10.50% 8.25% - 9.50%

�

10.50% - 11.50%Jacksonville 7.00% - 7.50% 8.50% - 9.50% 7.50% - 8.00% 9.50% - 10.50% 10.00% - 10.50% 11.00% - 12.00%Memphis 8.25% - 8.50% 8.50% - 9.00% 8.75% - 9.75% 9.50% - 10.00% 10.00% - 11.00% 11.00% - 12.00%Miami 6.00% - 7.00%

�

7.00% - 8.00% 6.50% - 7.50%

�

7.50% - 9.00% N/A N/A 8.00% - 10.00%Nashville 7.00% - 7.50% 8.00% - 8.50% 8.00% - 8.50% 9.00% - 9.50% 9.00% - 9.50% 10.00% - 10.50%Orlando 6.25% - 6.75%

�

7.00% - 8.00% 6.75% - 7.50%

�

8.00% - 9.00% 8.00% - 11.00% 10.00% +San Antonio 7.00% - 7.50% 7.50% - 8.00% 7.50% - 8.00%

�

8.00% - 8.50% 8.00% - 8.75%

�

8.50% - 9.25%Tampa 6.25% - 6.75%

�

7.00% - 8.00% 6.75% - 7.50%

�

8.00% - 9.00% 8.00% - 11.00% 10.00% +


FORECAST TRENDS*










IN THIS ISSUE:

Overview

Office

Multi-housing

Retail

Industrial

Hotels

Appendix


34

<< | >>Retail Power Center | Western Region

Decrease

Remain Flat

Increase

Denver 6.00% - 6.50%

�

N/A 7.75% - 8.25% 8.75% - 9.25% 9.00% - 9.50%

�

9.50% - 10.00%Las Vegas 6.50% - 7.50% 7.50% - 8.50% 7.00% - 8.00% 8.25% - 9.25% 7.50% - 9.00% 9.50% - 11.00%Los Angeles 6.00% - 6.50% 7.00% - 7.50% 7.00% - 7.50%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.00% - 9.50%Orange County 6.00% - 6.50% 7.00% - 7.50% 7.00% - 7.50%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.00% - 9.50%Phoenix 6.00% - 6.50% 7.00% - 7.50% 6.50% - 7.50% 8.00% - 9.00% 8.00% - 9.00% 10.00% -11.00%Portland 6.00% - 7.00% 7.50% - 8.50% 7.00% - 8.00%

�

8.50% - 9.50% 8.50% - 10.50% 11.00% - 13.00%Sacramento 6.50% - 7.25% 7.00% - 8.00% 7.25% - 8.00% 8.00% - 9.00% 8.25% - 9.00%

�

9.00% - 10.00%Salt Lake City 7.25% - 7.75%

�

7.75% - 8.25% 8.00% - 8.50% 8.50% - 9.50% 8.50% - 9.50%

�

9.00% - 9.50%San Diego 6.00% - 6.50% 7.00% - 7.50% 7.00% - 7.50%

�

8.00% - 8.50% 8.00% - 8.50%

�

9.00% - 9.50%San Francisco 5.25% - 6.25% 6.75% - 8.00% 6.00% - 6.75% 6.25% - 6.75% 8.00% - 9.00% 8.00% - 9.25%San Jose 6.25% - 6.75% 7.00% - 8.00% 7.25% - 7.75% 7.75% - 8.75% 9.00% - 9.50% 9.50% - 11.00%Seattle 6.00% - 7.00%

�

7.00% - 9.00% 7.00% - 8.00%

�

8.50% - 10.00% 8.00% - 9.00%

�

9.50% - 11.00%





for Value-Add

FORECAST TRENDS*








DenverLas VegasLos AngelesOrange CountyPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan FranciscoSan JoseSeattle



IN THIS ISSUE:

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Appendix


35

<< | >>High Street Retail | National

Class AStabilized Cap Rates Trend*

Boston 3.75% - 5.00%Chicago 4.50% - 5.50%

�

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

�

Miami 4.00% - 5.50%

�

Philadelphia 5.50% - 6.50%San Francisco 4.50% - 5.25%Seattle 4.50% - 5.50%Washington, DC 5.50% - 6.00%

Decrease

Remain Flat

Increase

FORECAST TRENDS*

Class A


BostonChicagoCharlotteLos AngelesManhattanMiamiPhiladelphiaSan FranciscoSeattleWashington, DC



IN THIS ISSUE:

Overview

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Retail

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Hotels

Appendix


36

<< | >>

For the 12 months through mid-year 2013, transaction activity in the industrial sector was $42.1 billion, up 33.7% over the year-earlier period.

Most of this growth came in the warehouse segments, which saw volume of $28.6 billion through mid-year 2013, up $9.2 billion from a year

earlier. The flex segment, by contrast, experienced an only $1.4 billion improvement to hit $13.6 billion in volume. Scaling for size, these figures

imply growth rates of 47.5% and 11.8% for the warehouse and flex segments, respectively. If total volume for the remainder of 2013 continues on

the pace set in the first half of the year, volume could reach $44.8 billion by year-end. By comparison, the average annual pace set from 2003

to 2007 was roughly $41.0 billion.

CBRE Capital Markets and Valuation professionals expect that cap rates for stabilized Class A industrial assets have largely reached the end of the

compression that began in early 2010. In 35 of the 41 markets surveyed, such cap rates are expected to be flat or increase over the next six months.

The same pattern is seen across different grades of industrial assets across the class spectrum.

CLICK TO DOWNLOAD

Select from the list below to access the current industrial key ratios, forecast and interactive map.

Download a Complete Industrial Current Key Ratios Chart (PDF)

Download a Complete Industrial Current Forecast Chart (PDF)

Download the Complete Industrial Current Key Ratios Map (Interactive PDF)NEW

Industrial | Overview

IN THIS ISSUE:

Overview

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Multi-housing

Retail

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Appendix


37

<< | >>Industrial | Eastern Region




for Value-AddBaltimore 5.70% - 6.00%

�

7.50% - 8.00% 6.25% - 6.80%

�

8.75% - 9.75% 8.50% - 9.75% 11.00% - 12.00%Boston 7.00% - 7.25% 7.50% - 8.00% 8.00% - 8.50% 8.50% - 9.00% 9.00% - 10.00%

�

10.00% - 11.00%Charlotte 6.75% - 7.00%

�

8.00% - 8.25% 7.25% - 7.50%

�

10.00% - 10.25% 8.00% - 8.25% 9.00% - 9.25%Northern New Jersey 4.75% - 5.25% 6.50% - 7.00% 6.00% - 6.50% 7.75% - 8.25% N/A N/A N/APhiladelphia 6.00% - 7.00% � 7.00% - 8.00% 7.00% - 8.00% 8.50% - 9.50% 8.50% - 9.50% � 10.50% - 11.50%Pittsburgh 7.75% - 8.25% 9.00% - 10.00% 8.50% - 9.50% 12.00% - 14.00% 10.00% - 11.00% � 15.00% - 18.00%Raleigh 7.50% - 8.50% � 8.50% - 9.50% N/A N/A N/A N/A N/A N/AWashington, DC 6.00% - 6.75%

�

7.00% - 8.00% 6.75% - 7.50%

�

8.00% - 9.00% 7.50% - 9.00%

�

9.00% - 11.00%

FORECAST TRENDS*








BaltimoreBostonCharlotteNorthern New JerseyPhiladelphiaPittsburghRaleighWashington, DC

Decrease

Remain Flat

Increase



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<< | >>Industrial | Midwestern Region

Chicago 5.50% - 5.75% 6.75% - 7.25% 6.75% - 7.25% 8.00% - 8.50% 8.50% - 9.50% � 10.00% - 11.00%Cincinnati 7.00% - 7.50% 8.00% - 9.00% 8.00% - 8.50% 9.00% - 10.00% 9.00% - 10.00% 10.00% - 12.00%Cleveland 8.00% - 8.50% � 9.00% - 10.00% 8.00% - 9.00% 10.00% - 12.00% 12.00% - 15.00% � 15.00% +Columbus 6.75% - 7.50% 8.00% - 9.50% 8.50% - 9.75% � 10.00% - 10.75% 9.50% - 10.50%

�

10.75% - 12.00%Detroit 8.00% - 8.50% � 9.00% - 10.00% 9.50% - 10.50% � 10.00% - 11.00% 11.00% - 13.00% � 11.00% - 12.00%Indianapolis 6.25% - 6.75%

�

7.00% - 8.00% 7.00% - 9.00%

�

8.00% - 10.00% 8.00% - 10.00%

�

9.00% - 11.00%Kansas City 6.75% - 7.25%

�

7.75% - 8.25% 7.75% - 8.25%

�

8.75% - 9.25% 9.00% - 10.00% 10.00% - 12.00%Minneapolis 6.25% - 6.75%

�

7.00% - 8.00% 7.00% - 8.00%

�

8.50% - 9.50% 9.00% - 11.00% 9.00% - 11.00%St. Louis 6.75% - 7.25%

�

7.00% - 8.00% 7.50% - 8.50%

�

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




for Value-Add


Decrease

Remain Flat

Increase


* Forecast trends represent the CBRE professional's opinion on where ratios are likely to trend in 2nd half of 2013 in their local market.

FORECAST TRENDS*








IN THIS ISSUE:

Overview

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Appendix


39

<< | >>Industrial | Southern Region




for Value-AddAtlanta 6.00% - 6.50%

�

7.25% - 7.75% 7.00% - 7.50%

�

8.50% - 9.00% 8.75% - 9.25% 10.00% - 10.50%Austin 6.50% - 7.50% 7.00% - 7.50% 7.75% - 8.25% 8.00% - 8.50% 8.50% - 9.00% 8.75% - 9.25%Dallas 6.00% - 6.25%

�

6.50% - 7.00% 7.00% - 7.50%

�

7.75% - 8.25% 8.00% - 9.00%

�

9.00% - 10.00%Houston 5.25% - 6.50%

�

6.25% - 7.25% 6.25% - 7.50%

�

7.50% - 8.50% 8.25% - 9.25%

�

8.75% - 9.75%Jacksonville 6.50% - 7.50%

�

8.25% - 8.75% 8.00% - 9.50% 10.50% - 11.50% 10.00% - 12.00% 12.00% - 13.00%Memphis 6.75% - 7.25%

�

8.00% - 8.50% 8.00% - 8.50%

�

8.50% - 9.50% 9.00% - 10.00% 10.00% - 11.00%Miami 5.25% - 6.00% 6.25% - 7.00% 5.50% - 6.50% 6.50% - 7.50% 6.00% - 7.50% 7.00% - 8.50%Nashville 6.50% - 7.50% 7.50% - 8.50% 8.00% - 9.00%

�

9.00% - 10.00% 9.00% - 10.00%

�

10.00% - 11.00%Orlando 6.00% - 8.00% 7.00% - 8.00% 8.00% - 9.00% 9.00% - 10.00% 9.50% - 10.00% 10.00% - 11.00%San Antonio 6.75% - 7.25% 7.25% - 7.75% 7.75% - 8.25% 8.25% - 8.75% 8.75% - 9.75%

�

9.75% - 10.75%Tampa 6.50% - 7.50% 7.25% - 8.25% 7.25% - 8.25% 8.50% - 9.25% 9.00% - 10.00% 9.50% - 11.00%





FORECAST TRENDS*








Decrease

Remain Flat

Increase

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<< | >>Industrial | Western Region

Albuquerque 7.75% - 8.25% 8.00% - 8.50% 8.50% - 9.00% 9.00% - 9.50% 9.00% - 9.50% 9.50% - 10.00%Denver 6.00% - 6.50% 6.50% -7.25% 7.00% - 7.50% � 7.75% - 8.50% 7.75% - 8.50%

�

9.25% - 9.75%Inland Empire 4.90% - 5.25% 5.50% - 6.00% 5.25% - 5.60%

�

5.75% - 6.25% 5.60% - 6.50%

�

6.25% - 7.00%Las Vegas 6.75% - 7.50%

�

7.50% - 8.50% 8.00% - 8.75%

�

8.50% - 9.25% 9.25% - 10.00%

�

9.50% - 10.50%Los Angeles 4.90% - 5.25% 5.50% - 6.00% 5.25% - 5.60%

�

5.75% - 6.25% 5.60% - 6.50%

�

6.25% - 7.00%Orange County 4.90% - 5.25%

�

5.50% - 6.00% 5.25% - 5.60%

�

5.75% - 6.25% 5.60% - 6.50%

�

6.25% - 7.00%Phoenix 6.50% - 7.00% 6.75% - 7.50% 7.00% - 7.75%

�

7.50% - 8.50% 8.00% - 9.25% 9.50% - 11.00%Portland 6.50% - 7.00%

�

7.00% - 7.75% 7.00% - 7.50%

�

7.50% - 8.50% 7.75% - 8.50%

�

8.50% - 9.50%Sacramento 6.75% - 7.50%

�

7.50% - 8.25% 7.75% - 8.75% 8.50% - 9.50% 9.00% - 10.00% 9.50% - 11.00%Salt Lake City 6.50% - 7.00%

�

7.00% - 7.50% 7.00% - 7.50%

�

7.50% - 8.25% 7.75% - 8.50%

�

8.00% - 9.00%San Diego 5.75% - 6.25% 6.25% - 6.75% 6.25% - 6.75%

�

6.50% - 7.00% 7.25% - 7.75% 7.75% - 8.25%San Francisco Bay Area 5.00% - 5.50%

�

5.50% - 6.00% 5.75% - 6.75%

�

6.25% - 7.50% 7.75% - 10.00% 10.00% - 12.00%Seattle 5.00% - 5.50% 6.50% - 7.00% 5.75% - 6.25%

�

6.75% - 7.50% 6.50% - 7.00% 7.50% - 8.50%




for Value-Add


Decrease

Remain Flat

Increase

* Forecast trends represent the CBRE professional's opinion on where ratios are likely to trend in 2nd half of 2013 in their local market.

Albuquerque N/A N/A N/ADenver N/AInland EmpireLas VegasLos AngelesOrange CountyPhoenixPortlandSacramentoSalt Lake CitySan DiegoSan Francisco Bay AreaSeattle

FORECAST TRENDS*








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Appendix


41

<< | >>

The CBRE Cap Rate Survey provides information on the hotels sector that is unavailable elsewhere. With transaction volume representing

roughly 10% of total activity across all commercial property types, the hotels sector often does not offer a sufficient number of transactions to

develop reliable sales comparables. For markets in which comparable sales are thin, we combine the insights of CBRE Capital Markets and

Valuation professionals to gauge the levels at which assets will trade.

Hotel transaction activity through mid-year 2013 was up 37.9% from the year-earlier period. According to RCA, investment volume in the past

12 months stood at $25.5 billion. This increased activity was heavily weighted in the limited-service sector, which saw volume growth of 87.2%

during first-half 2013, with total volume in the last 12 months of $8.1 billion. While investors are venturing into the limited-service sector once

again, the full-service segment is seeing increased volume as well. In the 12 months through mid-year 2013, volume in that sector totaled $17.4

billion, up 22.9% from the period one year earlier.

Data from the CBRE Cap Rate Survey suggest that the cap rate compression seen in the hotel sector starting in 2009 is now at an end. In only

one of the 38 markets surveyed did the Capital Markets and Valuation teams expect the luxury segment to see ongoing decreases in cap rates

over the next six months. Even in the economy segments, to which investors have only recently returned, there is little expectation of ongoing

cap rate compression, with only four of the 38 surveyed markets expected to see declines.

CLICK TO DOWNLOAD

Select from the list below to access the current hotels key ratios, forecast and interactive map.

Download a Complete Hotels Current Key Ratios Chart (PDF)

Download a Complete Hotels Current Forecast Chart (PDF)

Download the Complete Hotels Current Key Ratios Map (Interactive PDF)NEW

Hotels | Overview

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Overview

Office

Multi-housing

Retail

Industrial

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Appendix


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<< | >>Hotels | National

Luxury Full Service Select Service Economy CBD


Suburban StabilizedCap Rates

CBD StabilizedCap Rates





Suburban Stablized

Cap RatesAlbuquerque 8.50% - 9.00% 9.00% - 9.50% 9.00% - 9.50% 9.25% - 9.75% 9.00% - 9.50% 9.25% - 9.75% 9.50% - 10.00% 10.00% - 10.25%Atlanta 7.75% - 8.25% 8.00% - 8.50% 8.00% - 8.50% 8.25% - 8.75% 8.25% - 8.75% 8.50% - 9.00% 9.00% - 9.50% 9.50% - 10.00%Austin 7.00% - 8.00% 7.25% - 8.25% 7.25% - 8.25% 7.50% - 8.50% 7.00% - 8.00% 7.25% - 8.25% 8.00% - 10.50% 8.25% - 10.75%Baltimore 8.00% - 8.50% 8.25% - 8.75% 8.00% - 8.50% 8.50% - 9.00% 8.50% - 9.00% 8.50% - 9.00% 9.50% - 10.50% 9.50% - 10.50%Boston 6.50% - 7.00% 8.00% - 9.00% 6.50% - 7.00% 8.50% - 9.50% 7.00% - 8.00% 8.00% + 9.00% - 11.00% 9.00% - 11.00%Charlotte 7.75% - 8.25% 8.00% - 8.50% 8.00% - 8.50% 8.25% - 8.75% 8.25% - 8.75% 8.50% - 9.00% 9.00% - 9.50% 9.50% - 10.00%Chicago 5.50% - 7.00% 6.00% - 9.00% 5.50% - 7.00% 6.00% - 9.00% 6.00% - 8.00% 8.00% - 10.00% 7.50% - 10.50% 9.00% - 11.00%Cincinnati 6.50% - 9.00% 7.00% - 9.50% 7.00% - 9.50% 7.50% - 10.00% 8.00% - 10.00% 8.50% - 10.50% 8.50% - 11.00% 9.00% - 11.50%Cleveland 6.50% - 9.00% 7.00% - 9.50% 7.00% - 9.50% 7.50% - 10.00% 8.00% - 10.00% 8.50% - 10.50% 8.50% - 11.00% 9.00% - 11.50%Columbus 8.00% - 9.00% 8.50% - 9.50% 9.00% - 10.00% 9.50% - 10.50% 9.00% - 10.00% 9.50% - 10.50% 9.50% - 12.00% 10.00% - 12.50%Dallas 7.25% - 8.25% 7.25% - 8.25% 7.50% - 8.50% 7.50% - 8.50% 7.25% - 8.25% 7.25% - 8.25% 8.25% - 10.75% 8.25% - 10.75%Denver 6.50% - 7.00% 7.25% - 7.75% 6.75% - 7.25% 7.50% - 8.00% 6.75% - 7.25% 7.50% - 8.00% 7.75% - 8.25% 8.00% - 8.50%Detroit 7.50% - 8.50% 8.00% - 9.00% 8.50% - 9.50% 9.50% - 10.50% 9.00% - 10.00% 9.00% -10.00% 10.00% - 11.00% 10.50% - 11.00%Jacksonville 7.00% - 8.50% 7.00% - 8.50% 7.75% - 9.00% 8.00% - 9.00% 9.00% - 10.50% 9.25% - 10.50% 10.00% - 12.00% 10.00% - 12.00%Kansas City 8.00% - 8.50% 8.00% - 8.50% 9.25% - 10.00% 9.25% - 10.00% 8.50% - 9.00% 8.50% - 9.00% 10.00% - 11.00% 10.00% - 11.00%Las Vegas 7.00% - 8.00% 7.50% - 8.50% 7.00% - 8.00% 7.50% - 8.50% 7.50% - 8.50% 8.00% - 9.00% 8.00% - 11.00% 8.50% - 11.50%Los Angeles 5.50% - 6.50% 5.50% - 6.50% 6.50% - 7.50% 6.50% - 7.50% 6.50% - 8.00% 6.50% - 8.00% N/A 7.00% - 9.00%Miami 6.50% - 7.50% 7.00% - 8.50% 7.00% - 8.50% 7.00% - 8.50% 7.50% - 9.00% 7.50% - 9.00% 8.50% - 10.00% 9.00% - 11.00%Minneapolis 6.50% - 8.00% 6.75% - 8.00% 7.00% - 11.00% 7.50% - 11.50% 8.00% - 9.50% 8.00% - 9.50% 8.00% - 10.00% 8.00% - 11.50%Nashville 7.75% - 8.25% 8.00% - 8.50% 8.00% - 8.50% 8.25% - 8.75% 8.25% - 8.75% 8.50% - 9.00% 9.00% - 9.50% 9.50% - 10.00%New York 4.00% - 5.00% 5.50% - 6.00% 5.50% - 6.50% 6.50% - 7.50% 7.00% - 8.00% 7.00% - 8.00% 8.00% - 9.00% 8.00% - 10.00%Orange County 5.50% - 6.50% 5.50% - 6.50% 6.50% - 7.50% 6.50% - 7.50% 6.50% - 8.00% 6.50% - 8.00% 7.00% - 9.00% 7.00% - 9.00%Orlando 6.50% - 8.00% 6.75% - 8.00% 7.00% - 8.75% 7.25% - 8.75% 8.00% - 10.00% 8.25% - 10.00% 9.00% - 11.00% 9.25% - 11.00%Philadelphia 7.00% - 8.00% 7.50% - 8.50% 7.00% - 7.50% 7.25% - 7.75% 7.00% - 7.50% 7.25% - 7.75% 8.00% - 8.50% 8.25% - 8.75%Phoenix 7.50% - 8.25% 7.50% - 8.25% 8.50% - 9.50% 8.50% - 9.50% 8.75% - 10.00% 8.75% - 10.00% 9.50% - 10.50% 9.50% - 10.50%Pittsburgh 6.50% - 7.50% 7.00% - 7.50% 7.50% - 8.50% 7.50% - 8.50% 8.00% - 9.00% 8.00% - 9.00% 9.00% - 10.00% 9.00% - 11.00%Portland 6.50% - 8.00% 7.50% - 9.00% 7.00% - 8.50% 8.00% - 9.50% 6.50% - 9.00% 7.50% - 10.00% 9.00% - 11.00% 9.50% - 11.50%Raleigh 7.75% - 8.25% 8.00% - 8.50% 8.00% - 8.50% 8.25% - 8.75% 8.25% - 8.75% 8.50% - 9.00% 9.00% - 9.50% 9.50% - 10.00%Sacramento N/A N/A 7.50% - 9.50% 8.00% - 10.00% 8.00% - 10.00% 8.50% - 10.50% 9.00% - 11.00% 9.00% - 11.00%Salt Lake City 9.00% - 9.50% 9.50% - 10.00% 9.50% - 10.00% 9.75% - 10.25% 9.50% - 10.00% 9.75% - 10.25% 10.00% - 10.50% 10.50% - 10.75%San Antonio 7.50% - 8.50% 7.50% - 8.50% 7.75% - 8.75% 7.75% - 8.75% 7.50% - 8.50% 7.50% - 8.50% 8.50% - 11.00% 8.50% - 11.00%San Diego 5.50% - 6.50% 5.50% - 6.50% 6.50% - 7.50% 6.50% - 7.50% 6.50% - 8.00% 6.50% - 8.00% 7.00% - 9.00% 7.00% - 9.00%San Francisco 5.50% - 6.50% 6.00% - 7.00% 6.50% - 7.50% 7.50% - 8.50% 7.50% - 9.50% 8.00% - 10.00% 9.00% - 11.00% 9.00% - 11.00%San Jose 6.50% - 7.50% 6.50% - 7.50% 7.00% - 8.00% 7.50% - 8.50% 7.50% - 9.50% 8.00% - 10.00% 9.00% - 11.00% 9.00% - 11.00%Seattle 5.50% - 7.00% 6.00% - 8.00% 6.50% - 8.00% 7.25% - 8.50% 7.50% - 8.50% 8.00% - 9.00% 9.00% - 11.00% 10.00% - 11.50%St. Louis 6.00% - 8.00% 7.00% - 10.00% 6.00% - 8.00% 7.50% - 10.50% 7.00% - 9.00% 9.00% - 11.00% 8.00% - 11.00% 9.50% - 11.50%Tampa 6.00% - 8.00% 6.50% - 8.00% 7.00% - 8.75% 7.50% - 8.75% 8.00% - 10.00% 8.50% - 10.00% 9.00% - 11.00% 9.50% - 11.00%Washington, DC 6.00% - 7.00% 7.00% - 8.00% 7.00% - 7.50% 7.50% - 8.50% 7.00% - 8.00% 7.50% - 8.50% 8.00% - 9.00% 9.00% - 10.00%


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Appendix


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<< | >>Hotels | National

FORECAST TRENDS* Luxury Full Service Select Service Economy

CBD Stabilized Cap Rates

Suburban Stabilized Cap Rates


Suburban Stabilized Cap Rates


Suburban Stablized Cap Rates

CBD Stablized Cap Rates

Subrban StabilizedCap Rates

AlbuquerqueAtlantaAustinBaltimoreBostonCharlotteChicagoCincinnatiClevelandColumbusDallasDenverDetroitJacksonvilleKansas CityLas VegasLos AngelesMiamiMinneapolisNashvilleNew York Orange CountyOrlandoPhiladelphiaPhoenixPittsburghPortlandRaleighSacramentoSalt Lake CitySan AntonioSan DiegoSan FranciscoSan JoseSeattleSt. LouisTampaWashington, DC


Decrease

Remain Flat

Increase

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<< | >>Appendix | Definitions

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

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

communication with investors. The ranges represent those cap rates that a given property will trade at in the current market assuming that the asset

is leased at current market rents with typical market lease terms.

Use this assumption of leasing to current market rents to calculate gross rent potential, then subtract the standard economic loss factors, including

vacancy, that would be considered representative of a stable property in your market to achieve the effective gross income estimate. Reduce

the effective gross income by the projected stabilized expenses to derive the NOI. The cap rate is then calculated as the NOI divided by the

purchase price.

The going-in cap rate refers to the initial yield and is calculated as the ratio of the projected net income in the first year of the holding period over

the acquisition price of the property. This measure also represents the investor’s income return in the first year. Cap rates within each subtype will

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

Equation - 1st year proforma NOI divided by purchase price.

Stabilized Cap Rates (Multi-housing only)

Cap rate ranges are based on an estimated NOI derived by annualizing the last 90 days of revenue and subtracting buyer’s estimated stabilized

year-one expenses after adjustments for real estate taxes and reserves. Cap rates within each subtype will vary, occasionally falling outside of the

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

Equation - NOI includes the 90-day trailing gross revenue annualized less stabilized first-year expenses divided by the purchase price.

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Appendix


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<< | >>Appendix | Definitions (continued)

Return-on-Costs for Value-Add Properties – Return-on-Cost Calculation

The return-on-cost calculation is based upon the investor’s projected gross revenue assumption at stabilization, less the standard economic loss

factors, including vacancy, to achieve the effective gross income estimate. Reduce the effective gross income by the projected stabilized expenses

to derive the NOI. The NOI becomes the numerator for the Return-on-Cost calculation. The denominator is the investor’s purchase price plus all

capital improvements incurred to reach the stabilized NOI (tenant improvement cash outlay, commissions and property upgrades). Typically, for a

value-add investment, capital expenditures will be approximately 10% to 20% of the purchase price of the asset.

The return on these costs once leased at market rents is a measure investors can use to estimate the arbitrage opportunity that exists in stabilizing

a value-add property. The measure is directly comparable to the market cap rate of comparable stabilized assets with the spread between the two

indicating the arbitrage opportunity.

Equation - Projected NOI at stabilization divided by the sum of the purchase price plus all capital costs incurred to achieve the stabilized NOI.

Stabilized Property

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

CBD

The Central Business District of a major city.

Suburban

Mainly residential area proximate to a major city.

Class A

The most prestigious buildings competing for higher-quality tenants with above-average rental rates for the area, along with high-quality finishes,

state-of-the-art systems, exceptional accessibility and a definite market presence.

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Class B

Buildings competing for a wide range of tenants with rents in the average range for the area. Building finishes are fair to good for the area and the

systems are adequate, but the building does not compete with Class A at the same price point.

Class C

Buildings competing for tenants requiring functional space at rents below the average for the area.

Hotel-Specific Definitions

Full Service

A hotel property with more than 150 rooms, room service, an on-site restaurant and a concierge service.

Luxury

Hotel chains that are priced in the top 15.0% in terms of average annual room rates, according to Smith Travel Research.

Select Service

A hotel property with less than 150 rooms, no room service and no on-site restaurant or concierge service.

Economy

Hotel chains that are priced within the 20.0% to 40.0% range in terms of average annual room rates, according to Smith Travel Research.

Retail-Specific Definitions

Neighborhood/Community Center (Grocery Anchored)

Open-air retail center that is anchored by a grocery store and, in the case of community centers, a second major retail anchor. Can range from

75,000 to 350,000 square feet.

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Power Center

Open-air retail center typically occupied by large-format, big-box and value-oriented retailers, with very limited small-shop tenant space.

Can range in size from 100,000 square feet to over 600,000 square feet.

High Street

The primary retail shopping thoroughfare in the premiere location of an urban submarket, serving as a focal point for high-end shops and

luxury retailers.

Multi-housing-Specific Definitions

Infill/Urban

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

surrounding areas.

Suburban

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

© 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 use by 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/researchwww.cbre.com/valuation

CHRIS LUDEMANPresident

CBRE Capital Markets

JIM COSTELLOManaging Director, Americas Research

CBRE Global Research & Consulting

BRIAN STOFFERSChief Operating Officer, Capital Markets

President, Debt & Equity Finance

CBRE Capital Markets

RAY WONGExecutive Director, Americas Research


BROOK SCOTTInterim Head of Research, Americas


THOMAS MCDONNELLPresident

CBRE Valuation and Advisory Services

Documents

CBRE CAP RATE SURVEY - f.tlcollect.comf.tlcollect.com/fr2/213/58732/CapRateSurvey_Aug2013.pdf · The mid-year 2013 CBRE Cap Rate Survey shows that in the office sector, the average