The H1 2022 U.S. Cap Rate Survey (CRS) provides insights about changing investor sentiment. Data for this report was gathered in May and early June, reflecting deals that occurred throughout the first five months of the year. Since then, market conditions have been further impacted by high inflation, rising interest rates and weaker economic growth. The Cap Rate Survey provides an early perspective on cap rate trends across commercial real estate sectors.
Key Findings
• Concerns over rising interest rates are fueling expectations for moderate cap rate expansion.
• A weakening economic backdrop and rising rates are leading to tighter underwriting and lending assumptions.
• Strong fundamentals support milder yield expansion for industrial.
• Relative pricing makes quality retail attractive, despite expected weakness in marginal centers.
• Amid concern over rising operating costs, hotel investors are optimistic about leisure travel and resort properties.