"Good" Cap Rates for Non Residential Commercial Acquisitions in 2023

[Kim Hopkins]

I have a very unofficial survey to conduct! 

For those of you buying CRE right now, I'm very curious to hear the following:

1. Your property type. E.g. multi tenant industrial. 

2. The lending terms you're seeing. E.g. 60% LTV, 6.75% interest, 5 year term, 30 year AM

3. What cap rate you consider "good"? E.g. 7 - 7.5% 

4. What your expected COC return is with your underwriting? E.g. terms above yield 5.5% COC.

I'm struggling right now. Was stoked to find a property with a 7.5% cap but b/c of the lending terms, my cash on cash sucks. Do need to take tax savings into account though. $1 in my pocket would be better than paying a gazillion bucks in taxes... 

Can't wait to hear what you're seeing! 

[John McKee]

My last deal was 8.5% cap NNN flex industrial. Loan rate was 6.25%. 25% down. 7.5% is a good cap rate as long as your financing is below 6.5%. My only metrics are it has to be a class A location (easy to rent) and at lease a 1% spread between cap rate and Loan rate. My financing was done through the standard (insurance company) as banks are becoming more conservative.