The average capitalization rate rose 20 basis points to 9.6%,which CCIM/Landauer suggests is a sign investors are confidentabout future returns and prices.
The availability of relatively inexpensive capital is helpingfuel the national market, CCIM Institute president Darbin T. Skeanssays.
"The decline in interest rates pushed by the Fed providedexceptional opportunities for buyers to use the positive leverageavailable in the 200 basis point spread between the average caprate and cost of borrowed funds,". Skeans explains. "One keydifference between the current economic downturn and the recessionof the early '90s is that there is a very efficient commercialmortgage-backed securities after-market for debt instruments.
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