Sales of Commercial Properties Plunge by 23% in Aug. CAP Rates Fall to 6.5%

A report by Real Capital Analytics revealed that sales of income producing properties plunged year-over-year by 23% in August, while transactions involving multiple property portfolios fell by 46%. The report also indicated that cap rates are down to 6.5%, down from a peak of 8% during the financial crisis. The report also indicated that a greater percentage of commercial loans are being made by smaller local and regional financial institutions. One expert explained that commercial property investors are not being driven by expectations of asset appreciation, but rather by a desire for capital preservation because of low rates and a low yield curve.

http://finance.yahoo.com/news/commercial-real-estate-prices-are-back-to-pre-crash-highs-but-transactions-are-falling-193325370.html