US office cap rates for transactions of $5 million or more, posted an annual increase of 70 basis points in the second quarter of 2009, according to data provided by Real Capital Analytics (RCA) and published by Mortgage Bankers Association (MBA).
Specifically, the average office cap rate in the US increased from 7.0% in the second quarter of 2008 to 7.7% in the second quarter of this year.
On a quarter-to-quarter basis the national office cap rate involving transactions of $5 million or more increased 20 basis points as the average reported for the first quarter of 2009 is 7.5%.
The highest office cap rate reported over the period covered by the data (Q1 2003 to Q2 2009) is 8.9% and was recorded in the first quarter of 2003. Since then, quarterly office cap rates for transactions of $5 million or more have been decreasing until the second quarter of 2007 when they bottomed at 6.3%, representing a 260 basis point drop. Since Q2 2007, office cap rates have been steadily increasing until the second quarter of this year.
During the period covered by the data, the largest year-over-year drop in office cap rates was 90 basis points and was registered in Q2 2004, while the largest annual increase of 80 basis points was posted in Q4 2008.
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