Why cap rates haven't risen with interest rates so far in 2018
[{"id": "e3h6bto", "text": "... they have... this guy clearly isn't working with enough data. He's just referencing his own investments. \n\nCheck out ANY 2018 Q2 report from  Marcus &amp; Millichap, or CBRE, or boulder group or literally any firm with actual data and it's very clear that cap rates have seen at least a 10BPS increase.", "replies": [{"id": "e3h6r1x", "text": "they are moving up for sure! ", "replies": [{"id": "e3h6umk", "text": " Anyone active could tell you the same", "replies": [], "depth": 3}], "depth": 2}, {"id": "e3h7phb", "text": "I am at one of the firms mentioned above and in Chicago. In my opinion, Cap Rates are rising slower in Chicago compared to outside markets for two reasons; one being the election next year where both sides have completely different ideas on taxes. The other reason being a new tax assessor starting EOY 2018. Once the dust settles I see us on par with the other major cities.", "replies": [{"id": "e3hbmd7", "text": "New assessment, not new assessor? When did Maria Papas get the boot?", "replies": [], "depth": 3}], "depth": 2}, {"id": "e3hcz8o", "text": "Agreed, just looking at the 8 year data from one provider shows that office has crept up along with retail. Hotel has been steadily climbing. While multifamily and industrial has seen a continual slide. With multifamily rents shifting down from higher construction levels over the past 5 years, I think you'll start to see that turn as well. Maybe not for the newest product, but definitely in the overall sense.", "replies": [], "depth": 2}, {"id": "e3i6uns", "text": "Keep in mind he said LIBOR is at 1.75%. It\u2019s at like 2.1% today. I think LIBOR was at the levels he referred to back in early 2018", "replies": [], "depth": 2}], "depth": 1}, {"id": "e3huepx", "text": "I am a multifamily investor in Houston. I have only seen cap rates go down. The cap rate compression we are seeing here is out of this world. Far too much money out there at the moment. I hate cap rates and the idea behind them when, at the end of the day, it is nothing but a figure that can be manipulated by the Seller at his/her own will at any time. ", "replies": [{"id": "e3hwgd9", "text": "Massive exception to the rule here. The multifamily market in and outside the major Texas cities is ridiculous. We're getting offers at ridiculously low cap rates.\n\nThe rest of the country is not seeing compression like this.", "replies": [{"id": "e3hx43b", "text": "It's true. I am having to get used to 3 caps and it makes my head hurt like hell. It's tough for us boutique-y shops when we don't look at real estate like a bond to park money.", "replies": [{"id": "e3i0twr", "text": "That is a scary thought. It makes Chicago look good at a 5 -6 cap rate for Multifamily.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "e3ioho7", "text": "MOB cap rates are still pretty compressed. Jaw dropping to see what some of these REITs with dry powder hanging out are paying for MOBs lately, even in tertiary markets... ", "replies": [], "depth": 1}, {"id": "e3yz0kd", "text": "It's asset by asset right now. In-demand assets are still fetching record low cap rates. The demand for them is crazy. I'm in the process of dispo'ing a core office asset in Austin that was bid up far beyond what I guessed. In-fill industrial in sunshine markets are seeing compression. MFH in those markets are still hovering near bottom cap rates.\n\nBut we've seen some surprising feedback to some of our other assets: they didn't garner the offers we'd expected and it was because they just didn't fit a core profile, but also didn't offer enough meat on the bone to be value add.\n\nIt really depends on the amount of capital chasing a deal of your profile, and if its there, the cap rates are still rock bottom. If not, then you might be surprised in the high cap rate.", "replies": [], "depth": 1}]