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Our H1 2023 Cap Rate Survey results provide clues about how asset pricing has evolved during the year’s first six months.

Dots to the right of the 45-degree line on Figure 1 represent property types and markets where cap rates increased during H1. In all, about 65% of the plot points are in the cap-rate expansion zone, and the average increase was 30 basis points (bps). The pace of expansion slowed from more than 50 bps during the second half of 2022.   

Not surprisingly, office cap rates increased the most – up slightly more than 60 bps on average – with Class B and C office spaces suffering even greater expansion. Meanwhile, retail sector cap rates held up best, and were flat on average.

The CBRE Cap Rate survey sheds light on market signals that are especially valuable in today’s market when transaction volume is muted.