What Q4 Reports Had To Say About Capitalization Rate Trends
1.7 min read
As society continues to adjust to our newfound normal, capitalization rate trends remain unpredictable. According to Q4 statistics by CBRE, the retail, office and hotel sectors have seen a surprising upward trend, despite concerns of an imminent decrease in value. Industrial and low-rise residential properties took a hit, dipping below five and three percent.
Investors are looking past the economy's current state and into the future, as demand is expected to skyrocket post-pandemic. Mathew Burnett, Senior Vice President of Health Care Capital Markets at CBRE, states, "It's expected that 2021 will bring significant capital flows beginning as early as Q2 2021 as groups mobilize early to not miss out on the recovery and to take advantage of all-time low-interest rates. This increased demand, together with the downward pressure on development returns, suggests there may be room for cap rate compression in 2021."
Many Canadian cities saw a fluctuation in profitability during the last quarter of 2020 and were forced to adjust business models to stay afloat. Hopes for an economic upturn remain, as capitalization rate trends predict a steady increase in interest amongst critical players in every sector.
Learn more about Q4 capitalization rate trends.
Reference
Q4 cap rates trends vary by sector - remi network. (2021, February 17). Retrieved February 19, 2021, from https://www.reminetwork.com/articles/q4-cap-rates-trends-vary-by-sector/
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