U.S. metro average cap rates declined 30 basis points year-over-year from 5.6 percent in the fourth quarter of 2010 to 5.3 percent in the comparable period last year. The greatest compression was observed in the South, where cap rates fell 50 basis points to 5.7 percent. A surge in Denver investment activity contributed to a 40 basis point dip in the West. Cap rates in the Midwest fell 20 basis points to 5.2 percent and Northeast cap rates were virtually unchanged year-over-year.
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