Experts keep waiting for the yield to rise on multifamily investments.
At conferences, leading investors and industry analysts repeat the same question: “Are interest rates going to go up any more and will capitalization rates respond?” says Jim Costello, senior vice president with research firm Real Capital Analytics (RCA), who is currently making the rounds of the fall apartment conferences, most recently at the Association of Foreign Investors in Real Estate (AFIRE), held in September in Ellicott City, Md.
Benchmark interest rates have already risen more than half a percentage point in the last year—and they seem to be rising further this fall. But cap rates for apartment properties seem frozen in place.
Read more...Multifamily Investors Continue to Accept Low Cap Rates, But for How Long?