By at least one measure, the yield on investments in apartment properties still hasn’t matched the level of the real estate boom. That’s the “risk premium” that investors demand for apartments compared to Treasury bonds—a supposedly risk-free investment.
That means that cap rates on apartment buildings could yet inch even lower.
“The potential for commercial real estate risk premiums to edge lower and interest rates to resist the long-awaited increase may point to lower cap rates,” says Peter Muoio, executive vice president with Auction.com research.
Read more...Risk Premium Still High for Apartments | Multifamily content from National Real Estate Investor
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