I'm getting quotes back from lenders and debt is getting more expensive. We have to ask for a higher cap rate to make up for the change, but I don't think the sellers have fully began to drop their valuations yet. What is everyone else seeing? Are brokers and sellers cutting valuations now?
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From my slim observational window: a lot of brokers are with it, a lot of sellers are still in denial.
In the first quarter of this year, we saw low cap rates and high valuations continue. In the second quarter, we are still seeing low cap rates, but not as low. There are also less deals coming to market at the moment - maybe this is because sellers are waiting to see where pricing shakes out at.
Just my 2 cents.
To echo the others in this thread - In my markets, prices not coming down, but there have been several deals that have not traded and the reason cited was market not pricing the asset up to seller's expectation levels. Most brokers are with it, but the problem is that they are basically forced to give pricing expectations in order to win the business or else risk having a competitor give higher numbers, even though the BOV doesn't really mean jack shit once it hits the market (usually unpriced). There are a few groups that are notorious for doing this in my markets, and they subsequently have had some deals that haven't traded as a result of that practice coupled with where we are in the biz cycle.
^hit the nail on the head
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