Helpful cap rate feedback

[Ariel Gonzalez]

I could use some help with this. I'm underwriting an 80+ unit property and it seems like the purchase price is too high compared to the market. The property is classified as a B/C type of property, with the intention to implement a value-add strategy and it's going at a 6.5% cap rate. 

However, I researched the market and for Class A or B+ 90+ unit property, the overall cap rate is about 8.7%  (as of 3rd qtr 2024). Now I know this isn't an apples-to-apples comparison but to me I would seem to think that Class A properties would have a lower cap than a C+ value add property. (Less risk, more consistent cash flow, etc). 

Now I know that the Cap Rate is not the whole picture but I also don't want to overpay for an investment like this either. 

With that being said, the subject property's PP seems a bit too high but before I go back to the broker to provide my feedback I want to ask anyone here if I'm missing something here.

What do you all think?