National Retail Cap Rate Report


During third quarter 2019, the average cap rate for all retail transactions decreased 23 basis points as compared to the second quarter 2019, to end at an average of 6.74%. Year over year, the average is almost unchanged, with third quarter 2019 being 3 basis points lower than third quarter 2018. Among the four regions CBRE identifies, the average decreased in three (East, Midwest, and West) and increased slightly in one (South). The West continues to achieve the lowest cap rates for retail properties (averaging 6.08% in third quarter 2019), followed by the Midwest (7.00%), East (7.01%), and South (7.17%). The data for third quarter 2019 represents a reversal in trend, with the change showcasing the first decrease in the average reported cap since the end of 2017. Each quarter since the beginning of 2018 reflected an average increase of about 5 basis points. While data for one quarter may not reflect a change in trend, they confirm that investor sentiment remains very strong for retail real estate.

Retail-Q3-Cap-Rate-Trend

Source: Valuation VIEW
Data points are confirmed closed transactions adjusted for assumed financing and reflect overall market trends.


U.S. Retail Cap Rate Trends


Retail-Q3-Cap-Rate-Table

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Retail Valuation Practice


CBRE is the largest national provider of real estate appraisal services in the country with more than 550 licensed appraisers in the United States. CBRE's retail valuation practice has drawn from this large talent pool with more than 50 licensed appraisers who specialize in retail valuation. These appraisers form the core of our retail valuation team and ensure an experienced professional is responsible for each assignment.
 

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