By Mike Leahy, Matt Mowell                                                    

Every six months, CBRE surveys its U.S. capital markets and valuations professionals on whether they expect cap rates to rise or fall, and by how much.

Figure 1 shows the results for the four most recent Cap Rate Surveys (CRS) for all property types. Across the board, fewer respondents in the most recent survey (conducted in November and December 2024) believe cap rates will increase than believed so in the prior three CRS surveys. Currently, “no change” was the most frequent response for all property types. 

Although office still has the highest share of respondents who expect further valuation declines, the proportion has fallen precipitously over the past two years. Meanwhile, the outlook for offices continues to brighten, particularly for prime properties in gateway central cities. The outlook is less rosy in suburban office markets where investors continue to insist on a risk premium amid weak fundamentals and a paucity of prime spaces. This bifurcated office market performance is expected to continue.