I have a business mentor and friend that I am constantly debating the topic of today's cap rates. Today, he sent the following listing over to me with the title "Beverly Hills Trophy 6 Unit Property, Crazy High Cap Rate". I attached the listing below.
http://www.crelisting.net/FhG2x7h3w
This guy is asking for a 3.15% Cap Rate.
If you think that is surprising, Mcdonalds and Chik Fil A are selling in the high 3's to low 4's including ground leases. (see this link for some more sales prices on large tenants).
Is it just me or does this market seem like it is getting over heated? I don't understand why you would deploy your capital at those rates. It does not seem like a sustainable model long term.
So for those of you that have been through a few market cycles, what is your read on the current market? How are you hedging?
http://www.crelisting.net/FhG2x7h3w
This guy is asking for a 3.15% Cap Rate.
If you think that is surprising, Mcdonalds and Chik Fil A are selling in the high 3's to low 4's including ground leases. (see this link for some more sales prices on large tenants).
Is it just me or does this market seem like it is getting over heated? I don't understand why you would deploy your capital at those rates. It does not seem like a sustainable model long term.
So for those of you that have been through a few market cycles, what is your read on the current market? How are you hedging?
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