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Prime Multifamily Cap Rates Show Improvement

In some markets the going-in rate is now higher than the exit.

For the first time in two years, financial and operational metrics are improving for Class-A multifamily properties, says CBRE.

“Going-in cap rates, exit cap rates and unlevered internal rates of return (IRRs) targets for prime multifamily assets improved slightly in Q1 for the first time since the Federal Reserve began raising interest rates in early 2022,” they wrote. “These improvements indicate that key underwriting metrics may have peaked in anticipation of possible rate cuts later this year.”

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Erik Sherman

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