Multifamily Cap Rates - Denver

[Betsey Wagner]

Hi All, I am in Denver and making the move from commercial to multifamily. I am hoping to get an idea of what the general cap rate for multifamily in Denver and surrounds is currently. What were you getting pre-COVID? I would also love to hear about cap rates in other areas throughout the country!!

[Steve K.]

There's a pretty wide range depending on size/classification of building and location. In the nicer parts of town, small MF, class A I'd say an average cap range is 4-6. For larger buildings, Class B-C, 6-8 is more common. I'm not really seeing much above a 10 cap lately and anything above 8 is generally in a rougher hood, is in bad condition or has some sort of issue. I had a client pick up a 26-unit mixed-use property at an 8-cap earlier this year. It was a value-add play that needed work, was listed as a 6 cap which is more common for the location but we negotiated hard.