Office Cap Rates Fall Flat

Jonathan Larsen is a principal and managing director at Avison Young.

Office cap rates may be about to hit a wall, according to the first quarter report from Avison Young. The report—which showed a rocky first quarter with 426,000 square feet of negative absorption and a 14.5% overall vacancy rate in Los Angeles—predicted a flattening of cap rates in office over the next 12 months due to rising interest rates, higher treasury bill rates and the slow rate of inflation, according to the report. To find out more about this emerging trend and how it will impact investment activity in Los Angeles, we sat down with Jonathan Larsen, principal and managing director at Avison Young, for an exclusive interview.

GlobeSt.com: Why are office cap rates expected to flatten this year?