Real Capital Solutions’ Post

Cap rates are growing across all product types - but the discrepancy between public and private cap rates is what has the capital markets in a bit of situation.

Recent data from ABS reveals that it is taking much longer to build homes of all types since the pandemic started and it is all because of the surging material costs this year. 👷 🏗️ 📊 In the three and a half years from the start of the pandemic to the September quarter of this year, the cost of building a detached house has risen 37%, equivalent to 9.4% a year. That’s nearly two and half times as quick as its historical growth rate. Source: ABS and realestate.com.au #MCGQS #MCGQuantitySurveyors #QuantitySurveyor #MaximiseandProtect #MaximiseandProtectwithMCG #PropertyInvesting #PropertyInvestor #PropertyInvestment #Investing #RealEstate #RealEstateInvesting #RealEstateInvestment #RealEstateData #RealEstateNews #AustraliaRealEstateNews #News #Data #Dwellings #ConstructionCost

#FitchRatings expects a more protracted U.S. office commercial real estate (CRE) sector recovery during this cycle than following the Global Financial Crisis (GFC). Current trends in office property values suggest further declines this cycle to levels that match or exceed those seen during the GFC. Learn More: https://ow.ly/rO3G50R3eAA #StructuredFinance #CRE #CommercialRealEstate

The change in working patterns caused by the pandemic has led to a significant revaluation of office real estate. Given the sharp increase in financing costs, a fair question to ask is if whether commercial real estate can create significant risk in the US financial system and specifically for banks.   In this recent piece my colleague James Ashworth and I delve into how, unlike in past real estate crises, this time the exposure of large US banks is low and the risk appears to be concentrated in smaller banks. https://lnkd.in/gjECsZ-q Allianz Global Investors   #commercialrealestate #banking #risk

J.P. Morgan released its mid-year outlook on the commercial real estate market. While the #office sector still struggles, bright areas include #multifamily, #retail and #industrial. Read the report for more on these and other insights: https://bit.ly/3RGRnLF #commercialrealestate #realestatelaw #realestateoutlook

Select Market & Sector Insights from Green Street's most recent Cap Rate Observer. #Apartments: Sun Belt cap rates are in line with cap rates in Gateway markets on average. #Industrial: Since peak pricing, industrial asset values have fallen by ~17% and cap rates have risen by 140 bps. #SelfStorage: Cap rates increased 75 bps in ’23, and asset values are down ~22% cumulatively since the early-’22 peak. #Office: Relative to pre-Covid levels, office values have declined by 55-60% for B/B+ quality assets, while REIT-quality asset values have fallen 35-40%. #SFR: Recent portfolio trades suggest large institutions are willing to pay low-to-mid 5% cap rates for average-quality product. #StripCenters: Like other sectors, D.C. and Bay Area values have fallen further than the top 50 market average over the last two years #caprates #valuation #cre #commercialrealestate #privateequity #investing #research #duediligence

Baker Tilly's periodic Commercial Real Estate Report Link below. Please read for informative and intelligent insight into the state of this important market in terms of economic indicators, primary drivers, et.. .

Mixed Conditions, Improving Outlook: A Global Perspective on Commercial Real Estate Read the full article below..

One way to visualize the shift in CRE fundamentals. Q3 transaction sales volume: - Industrial down 40% for both YoY and the pre-pandemic trend line. - Retail down 50% YoY but only 35% off trend. - Office down as much as 80% from the pre-pandemic trend.

📊 The Power of Cap Rates in Real Estate Valuation 🏢 Take a look at this visual representation of an apartment building with a $100,000 Net Operating Income (NOI). Starting with a 4% Cap Rate at the top, the Cap Rate gradually drops to 10% at the bottom. 💡 What does this mean? As the Cap Rate increases, the valuation of the property decreases. A lower Cap Rate often signals a higher property value due to lower perceived risk and stronger market demand. Understanding this relationship is crucial when assessing investment opportunities—every percentage change in the Cap Rate can significantly impact your property's worth. Make sure you're running the numbers right! #RealEstateInvesting #CommercialRealEstate #CapRate #PropertyValuation #MultifamilyInvesting