In the second quarter of 2009, US retail cap rates for transactions of $5 million or more, posted an annual increase of 80 basis points, according to data provided by Real Capital Analytics (RCA) and published by Mortgage Bankers Association (MBA).
In particular, the average retail cap rate in the US increased from 6.7% in the second quarter of 2008 to 7.5% in the second quarter of this year. This was the largest annual increase posted since the first quarter of 2005, which marks the beginning of the historical annual changes in US retail cap rate that can be calculated from the data published in the MBA report.
Note that on a quarter-to-quarter basis the national retail cap rate involving transactions of $5 million or more increased 20 basis points as the average reported for the first quarter of 2009 is 7.3%.
The highest rate reported is 8.1% and was recorded in the first quarter of 2004, which is the beginning of the period for which historical cap rate level data are published in the MBA report. Since then, retail cap rates for transactions of $5 million or more have been mostly decreasing until the second quarter of 2007 when they bottomed at 6.6%, representing a 150 basis point drop. Since then US retail cap rates have been mostly on an upward path until the second quarter of this year.
The largest year-over-year drop in retail cap rates that took place since the first quarter of 2005 was 70 basis points and was registered in three of the four quarters in 2005.
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