Commodity office stock is tough to price these days

Mar 25, 2025, 14:10 PM by Matt Mowell

The most recent Cap Rate Survey suggests greater uncertainty around office pricing, particularly for Class B and C assets where fundamentals and financial performance have deteriorated significantly more.

CBRE’s Cap Rate Surveys¹ shed light on both the average cap rate and the spread between the lowest and highest estimates. For example, if the lowest expected cap rate for a sector is 6% and the highest is 7%, the spread is 1. As you can see, for office assets, the spread has widened considerably compared with other sectors. This suggests greater uncertainty around office pricing, particularly for Class B and C assets where fundamentals and financial performance have deteriorated significantly more.

¹CBRE surveys its valuations and capital markets professionals twice a year to gauge their opinion on current and future asset pricing.

Figure 1: Average Spread in Cap Rates across Sectors (Percentage Points)

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