Cap rates are the top topic for multifamily investors—especially for Southern California players, where cap rates are at all-time lows. Cap rates, however, can be subjective, according to Mark Ventre, VP at Stepp Commercial. Ventre focuses on the client's needs rather than on a cap rate. In this exclusive interview, Ventre explains why cap rates can be subjective and how he is advising clients looking for multifamily opportunities.

GlobeSt.com: Can you describe the evolution you have experienced with how apartment investors measure an asset's value?

Mark Ventre: Some of my favorite conversations are with clients that have owned apartment buildings for a generation or more. They tell stories of days when Westside Los Angeles buildings fetched five or six times gross and they thought that was pricey! They also didn't care about cap rates, in fact some didn't know what they were. It was the gross rent multiplier (GRM) that mattered. Investors wanted to know how many years it would take to earn back what was paid for the property in gross dollars.