Can’t make sense of this market. On one hand, you have record dry powder sitting on the sidelines, increased international interest in US RE that’s very willing to accept a low cap for “safety,” and low IR.
On the other, you have IR risk on the horizon, and pricing exhaustion from investors.
5 years ago, and 10 year ago before that, we all didn’t think cap rates should go lower, but alas. Where you do think Cap Rates go from here?
| +83 | LP coming into deal at higher land basis. How to model returns to GP? | 19 | 10h | |
| +76 | Increasing RE Industry's Cash Compensation, Collectively | 43 | 1d | |
| +73 | Major Decisions | 13 | 2d | |
| +44 | Being asked to stay behind and train my replacement | 11 | 6h | |
| +34 | Niche down to an operator or stay an allocator | 11 | 8h | |
| +24 | Breaking into CRE late 20s | 7 | 5d | |
| +23 | Thoughts on joining an early-stage REPE fund | 7 | 1d | |
| +22 | Self Storage ECRI | 9 | 3d | |
| +20 | How to get good at RE Modelling? | 18 | 11h | |
| +20 | Public Homebuilders | 7 | 6h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
They can go lower. Capital has to be deployed and the competition for non-RE private investments is only increasing . The situation reveals deep problems in the economy and a lack of innovation/technological progress that we are trained to ignore to the extent possible.
Short answer: always
Always what ? The fuck?
Yes, go look at cap rates in Hong Kong (at least pre-China take over during Covid), cap rates averaged in the 2-3% range for many asset types (with individual assets trading with a 1 handle at times)... they can fluctuate up a lot too.
And ponder this.... Hong Kong pegs their currency to the US dollar... so our monetary policy and fed rates are basically theirs!
Nihil sapiente rerum repellendus optio culpa dolore. Ut qui consequatur eum magni ea et. Laboriosam porro architecto dicta. Unde modi vel animi ut et ducimus.
Ullam est facere dolor sit. Dolores molestiae laudantium odio consequatur aut ad quia. Inventore aspernatur iure velit ea delectus. Ipsa neque quo rerum quaerat et velit animi. Repellendus aut rerum laboriosam praesentium. Dolor omnis dolores accusantium corporis asperiores et et.
Incidunt voluptatem maxime voluptate odio ipsa nemo. Dolores sint est quia voluptatem. Omnis architecto eveniet excepturi id. Doloribus illum ducimus sint sed quibusdam minima. Quod totam odit voluptatem ad quidem quod.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...