Commercial real estate capitalization rates have been found to be good indicators of expected returns in commercial properties. Recent declines in these cap rates appear to be signaling a commercial real estate rebound, indicating improved investor expectations of price growth in the market. Movements in national cap rates are the predominant drivers of changes in cap rates in local markets. Therefore, the anticipated commercial real estate rebound is likely to be widespread across many metropolitan areas. http://www.frbsf.org/publications/economics/letter/2011/el2011-29.html
CAP rates are improving
September 19, 2011 by David Bergman, CRS, Real Estate Broker
