Lowest Ever Cap Rate Spreads Over Treasuries
Saw this chart about record low spreads between cap rates and 10 year. It lines up with what everyone else is seeing. Thought it would be good to discuss. Any of you out there in the middle of dispositions, are you willing to cut price to meet the market or just holding steady?
Basically why buy any RE below 6 cap when risk free is 5.25..
Copers will come in saying they have 50% MTM and a bunch of other nonsense
You're comparing a growing yield to a flat yield. A treasury rate is fixed, while if you buy real estate well, your cap rate / NOI should be growing year over year
I already said all my deals have 50% MTM lol
In theory sure, but not right now. Operating Expenses are far surpassing revenue growth. Our payroll, insurance, property tax, are significantly higher % wise than its ever been. So quite the opposite, NOI is either flat or decreasing.
Has to be super value add or assumable debt. Deals are dying. Volume will heavily decrease unless sellers are willing to take a haircut. And a big one at that.
Real estate is fucked lol
Real Estate hasn't even been working as an inflation hedge in some sectors (ex - multifamily real rent growth has been flat/negative over the past year or two). So the yield argument is bad because Treasuries are more compelling, and the growth argument is a stretch at best for a lot of deals these days... LMK if I am missing something
More like flat to negative since late June / early July 2022 in the Sun Belt
How worried are you guys about getting laid off? Never truly felt at risk in 10+ years, until recent
At my current job not at all but I make about 50-60% less then market for my role minimum.
Same sentiment. Merchant build multi-family developnment just doesnt make sense right now
I did get laid off. Now 6 months searching at the Director level. Roles are few and far between, obviously.
all agree to take 6 month sabbaticals?
Be careful. Turns into 3 years faster than you'd think.
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