The Great Cap Rate Puzzle: Rethinking How Net Lease Real Estate Responds to Interest Rates
Why this matters
Commercial real estate continues to digest a multi-year reset in cost of capital. Transaction velocity is below the 2019-2021 trend but improving, cap rates have stabilized across most stabilized property types, and the bid-ask gap has narrowed materially in the past two quarters. Sponsors with permanent capital and operating platforms have an advantage in the current execution environment. The next twelve months will continue to reward underwriting discipline and operational sophistication over balance-sheet aggression.
Editorial analysis · Real Estate Trail Editorial
By Jeff Lefko of Hanley Investment Group Real Estate Advisors For much of the last few decades, commercial real estate investors have operated under a simple assumption: interest rates rise, and cap rates rise with th…
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