Standard CAP rate? Do they differ between types of investments?

[Brandon Trafford]

Hey BP,

I'm currently browsing commercial buy and hold properties, and I've noticed a large variance in the properties CAP rates. What would you guys recommend for a standard cap rate? Does the cap rate tend to differ between office buildings, post offices, and multi families?

Any advise helps.

Thanks,

Brandon

[Greg Scharlemann]

Yes! Differs on property type, class and market. You should compare cap rates across similar property types with similar characteristics. A retail strip center and office building will have completely different cap rates and the cap rate will vary (to some degree) based on the quality of the building and tenants.