**Survey Suggests Cap Rates May Have Peaked, Showing Signs of Compression**
Cap rates may have reached their peak, according to a recent CBRE survey of more than 200 brokers. The findings, released Monday, show a slight compression in cap rates during the first half of 2025. The all-property average cap rate narrowed by nine basis points to 6.84% at midyear, amid continued volatility in Treasury yields and the implementation of broader-than-expected tariffs.
“While macroeconomic uncertainty persists, we’re seeing clear indications that cap rates have passed their peak,” said Tom Edwards, Global President of Valuation & Advisory Services for CBRE. “This compression trend underscores the market’s resilience and adaptability as investors respond to shifting trade policies and broader economic changes.”
The survey also noted that multifamily assets are now projected to deliver the strongest long-term performance, overtaking industrial properties. While the retail sector continues to show stability, the office sector—particularly Class B and C assets—faces ongoing pricing challenges and greater variation in valuations.
These trends highlight evolving investor sentiment and capital market dynamics as the market adjusts to geopolitical and economic headwinds.
