DFW cap rates and coc Multifamily

[Sanjoy V.]

I know most of us don’t always go by the cap rate for property, but I think that’s probably what we have, to be able to compare properties and to sort of assess the market. For a class C product but in a decent blue collar neighborhood what cap rates and coc to expect in the current market for 1. Dallas downtown, further north, carollton, Irving, plano etc 2. Fort Worth 3. Arlington. Thanks

[Rich Lopes]

@Sanjoy V., CA/DFW/TX now you are talking about 2 different geographies with their own vastly different economies - so it will be hard to compare the 2. The TX tertiary market (Kileen, waco) is similar or better than CA tertiary (Fresno, Madera, Stockton) market per my opinion. Now within these tertiary markets there are probably A - D class areas with A-D class properties. It's hard to find a A class product in D class neighborhood but it's probably possible to find D/C class product in A class neighborhood. What I am saying is in DFW, the gap between cap rates for C & A class products has shrunk quite a bit between now and what was it few years ago. What that means, you can probably buy an A class product with almost the same price or slightly more than what you would pay for C class product - so be wary of that.

For  A class neighborhood in CA, there is negative cap rate - because it's more of an appreciate play vs in DFW you might get is for 3 or 4%.