Emerging Cap Rate Spreads and Trends

Written By Christian Desnoes

Beyond the Average: ​
What Cap Rates Really Reveal About CRE Opportunities​

Average Cap Rates Offer a Benchmark, Not the Full Picture​

  • National apartment cap rate averages 6%, but varies from 4.7% to 7.2% by market and asset class​

  • Primary markets and Class A assets tend to command lower cap rates​

  • Averages help track broad trends but may not reflect individual deal realities​

Market and Asset Type Influence Cap Rate Ranges​

  • Cap rate spreads narrow across market tiers; gap between primary and tertiary markets has halved since 2018​

  • Class and metro trends shape cap rate variance—e.g., hotels (6–11%), industrial (5–8.1%)​

Granular Data Reveals Strategic Investment Opportunities​

  • Cap rate ranges signal where investors can find yield vs. stability​

  • Outliers and micro trends offer entry points others may overlook​

  • Success often comes from drilling past averages to uncover local dynamics​

As of 1Q 2025​
MT Retail = Multi-Tenant Retail​
Includes sales $1 million and greater​
Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics​

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Christian Desnoes
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