In Secondary/Tertiary markets where there is not much transaction volume on certain types of assets, lets say Class A multifamily, how do people determine stabilized cap rates? Do you use guides like Integra and just do the best you can? How do you make the call between calling the market cap a 5.00%, or a 5.25%?
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talk to brokers and get actual comps. because that's where appraisers get their data
You generally dont hear about equity using appraisers to size deals as appraiser always lag the market by 6-12 months.
What city is there a deal that requires a 5 cap in a market that doesnt have enough transaction volume to size?
Talk to brokers in the market. Expand your comp search to similar markets in the region. Use PWC investor survey and Cbre cap rate survey...then pick the cap rate that makes your deal work.
lol.
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