Urbis Think Tank

US commercial real estate markets are expected to improve in coming months according to recent analysis from the Federal Reserve Bank of San Francisco (FRBSF).

By analysing the trends in cap rates since mid 2010, it is becoming apparent that investors are expecting an appreciation in CRE prices.

Of interest, the FRBSF noted that “Most cap rate movements are national in scope. Hence, market participants apparently expect a widespread rebound across most U.S. metropolitan areas. Of course, prices in some areas are more closely tied to the national CRE cycle than prices in other areas, so some variation in price appreciation is expected among cities.”

The full economic letter written by Bart Hobijn, John Krainer and David Lang can be accessed here.