In today’s Daily Data Discussion post we’ll finish the discussion started yesterday by looking at the markets around the country with the lowest Class A multifamily cap rates around the country. 

A couple of emails came in once again asking about the sourcing of the data.  The values presented here have been obtained in interviews conducted by members of our research staff during the past four months.  The information for every market in our database is updated at least three times per year (every four months), often more frequently if critical market changes have occurred in the interim.  Our team interviews multifamily brokers as well as property managers and averages the information that we receive from them. 

If a market happened to be reviewed three months ago – could cap rates have changed in that time frame?  Sure, it’s possible; in today’s economic environment valuation changes are being pushed in some markets at rates considered impossible a few years ago. 

Here are the markets in our database as of today with the lowest Class A multifamily cap rates –

1) Sarasota, FL 2.5%
2) Dayton, OH  2.5%
3) Naples, FL  3%
4) Riverside, CA 3%
5) Vallejo, CA  3%
Note- there were 18 markets with Class A cap rates in the 3% range. 

Database Average: 5%
Database Median: 5%

Tomorrow we’ll take a look at the markets around the country ranking the highest on the 2008 Milken Institute Best Performing Cities Index for small cities. 

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