Kaylee Marcum’s Post

Going-in cap rates, exit cap rates and unlevered internal rate of return (IRR) targets for prime multifamily assets were essentially unchanged for a second consecutive quarter in Q2, likely due to expectations that the Fed will begin cutting interest rates later this year. This stabilization follows quarterly increases in all three metrics due to rising interest rates beginning in early 2022. #CBREMultifamily Matt Vance Kelli Carhart

Following quarterly increases for two years due to rising interest rates, going-in cap rates, exit cap rates and unlevered internal rate of return (IRR) targets for prime multifamily assets remained unchanged for a second consecutive quarter in Q2. This trend could be due to expectations that the Fed will begin cutting interest rates later this year. Dallas was the only market with an exit cap rate increase, up by 13 bps.

Following two years of quarterly increases driven by rising interest rates, the going-in cap rates, exit cap rates, and unlevered IRR targets for prime multifamily assets have remained steady for the second consecutive quarter in Q2. This stability may reflect expectations of potential Fed interest rate cuts later this year. Is this a sign of market stabilization?

Going-in cap rates, exit cap rates and unlevered internal rate of return (IRR) targets for prime multifamily assets improved slightly in Q1 for the first time since the Federal Reserve began raising interest rates in early 2022. These improvements indicate that key underwriting metrics may have peaked in anticipation of possible rate cuts later this year.

📊 Exciting news in the multifamily real estate market! Cap rates are stabilizing, moving closer to historically normal levels as the market adjusts to the Fed's recent rate cut. This shift signals a positive trend for investors and highlights the resilience of the sector. 🏢💼 https://ow.ly/mjh150TrC8N #RealEstate #CapRates #MarketTrends #CapitalConnect #eXpCommercial

📊 Exciting news in the multifamily real estate market! Cap rates are stabilizing, moving closer to historically normal levels as the market adjusts to the Fed's recent rate cut. This shift signals a positive trend for investors and highlights the resilience of the sector. 🏢💼 https://ow.ly/f7kG50TrC8Q #RealEstate #CapRates #MarketTrends #CapitalConnect #eXpCommercial

📈 Cap Rates Stabilize as Market Adjusts to Fed’s Rate Cut 📈 The commercial real estate market, particularly in the multifamily sector, is showing early signs of stabilization after the Federal Reserve’s 50 bps rate cut. While experts see positive momentum, they caution that property values may not immediately reflect the rate reduction. 📊 Key Highlights: 1. Cap Rates Approaching Normal Levels: After recent volatility, multifamily cap rates are stabilizing around the low to mid-5% range, offering a healthier and more sustainable market. 2. Increased Deal Activity: Narrowing bid-ask spreads have brought sidelined buyers back into the market. Recent weeks have seen more transaction activity, signaling a return to normalcy. 3. Long-Term Outlook for Property Values: Experts, including Mitch Sinberg and Roberto Pesant of Berkadia, emphasize that the Fed’s rate cut may not have an immediate impact on property values. It may take time for valuations to adjust to the new economic conditions. 4. Pent-Up Demand Driving Momentum: Stabilizing interest rates are attracting investors who had previously held back, and transaction volumes are expected to rise through the second half of 2024. As cap rates stabilize and the market adapts to the rate cuts, the outlook for multifamily investment looks promising. #Colliers #Pittsburgh #MoreIn24 #ThriveIn25 #ClosersCoffee #ColliersCapitalMarkets https://lnkd.in/eqTE7_yV

Prime Multifamily Metrics Continue to Increase in Q4 Despite the Federal Reserve holding interest rates steady since July, unlevered internal rate of return (IRR) targets, going-in cap rates and exit cap rates for prime multifamily assets increased slightly in Q4. Across-the-board decreases are expected once the Fed begins cutting interest rates, likely by midyear. https://lnkd.in/g2fHPp4n

Prime Multifamily Metrics Continue to Increase in Q4 Despite the Federal Reserve holding interest rates steady since July, unlevered internal rate of return (IRR) targets, going-in cap rates and exit cap rates for prime multifamily assets increased slightly in Q4. Across-the-board decreases are expected once the Fed begins cutting interest rates, likely by midyear. https://lnkd.in/gm9j-nEQ

Multifamily investors have reason for optimism heading into 2025, with solid fundamentals and demand trends anchoring the market. The expected slowdown in new deliveries could set the stage for stronger rent growth, especially in high-growth Sunbelt markets. As borrowing costs ease and transaction activity stabilizes, the sector appears poised for renewed momentum. https://lnkd.in/eP8Y_u59