National Retail Cap Rate Report


During first quarter 2020, the average cap rate for all retail transactions decreased 23 basis points as compared to the fourth quarter 2019, to end at an average of 6.76%. Year over year, the average has decreased, with first quarter 2020 being 5 basis points lower than first quarter 2019. Among the six regions CBRE identifies, the average decreased in four (Midwest, Northeast, South Central, and Southeast) and increased in two (Mountain and Pacific West). The Pacific West continues to achieve the lowest cap rates for retail properties (averaging 6.03% in first quarter 2020), followed by Northeast (6.34%), Southeast (6.59%), Mountain (6.71%), South Central (6.74%), and Midwest (7.42%). The data for first quarter 2020 represents a continuation in long-term trend after a brief reversal during Q4 2019. However, cap rates have generally been increasing since 2017. While data for one quarter may not reflect a change in trend, they confirm that investors were more aggressive during first quarter 2020. It is imperative to note that the early effects of the COVID-19 pandemic were not felt until very late in first quarter. The second quarter data are likely to show more of the effects of the pandemic on retail property types.

CBRE’s Valuation Cap Rate Reports include data compiled during the first quarter of 2020, when the potential adverse impacts of the COVID-19 pandemic were just beginning in the United States. CBRE Valuation & Advisory Services is dedicated to providing cap rate insights on a quarterly basis and benchmarking analytics based on historical data. We will continue to keep you apprised of the latest changes in market conditions throughout this unprecedented time.

RETAIL-Cap-Rate-Trend-Q12020

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-2020Q1-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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