CAP rates will compress in Retail and Office Space?

[Diem Tran]

From reading posts on BP, I'm getting the impression that commercial real estate, specifically retail and office space are in the recovery stage. So does this mean that we should expect CAP rates to compress in the near future, especially in markets like Miami, Dallas, Phoenix, etc? Thanks.

[Eric Odum]

Depends is always a good answer. Real estate markets are local. I don't know how much more areas like Miami plus the Core national markets can compress. The pricing I see is beyond reason, imo. Secondary and tertiary markets in Florida have largely not recovered yet and I believe you can still find value there for potential CAP compression, as investors continue to move out from core markets looking for opportunity.