Perhaps that is where they trade in that area and the cap rates are simply extremely compressed?

Help me understand Cap rate compression.

They aren't as competitive as Fannie/Freddie, but margin compression has brought rates within spitting distance for most investors.

Margins are compressed as the asset class matures.

I would adjust them now if this is a premium compression event for you Use the enemy method and see what other hosts are charging 

Meanwhile, because storage is still recognized as a strong asset class, property values have remained high, leading to compressed capitalization rates.Fewer deals are coming to market, and for those that are, it is becoming increasingly difficult to negotiate terms that leave both the buyer and the seller satisfied.However, while acquisitions may be slowing, the market is ripe for opportunistic ventures like ground-up development.

Legit operators that were around before COVID have slowed down because CoC and IRR have been compressed with so much competition. 

With Treasury and related rates such as SOFR on the increase, Wall Street is expecting greater returns from the HMLs they support, thus compressing their margins as they compete among themselves.

As price compression continues, and it WILL continue, townhomes are the clear winner. 

There are also a ton of people who seem to be getting in to REI (which may be one of the stronger indicators that the market is near the top) and the additional money and interest seem to be compressing Cap Rates (here comes Bob Bowling - hope my interpretation is right!)