Going rent rates and cap rates.
Just reaching out here if anyone in South Dakota mainly Sioux Falls (or any place state wide) area is currently investing. What is the cap rate in SD (5?), for commercial multi-family what is the current rent at per unit?
Without a detailed investigation, I can tell you that cap rates and current rent per unit will have a wide range based on submarket, location within the submarket, age, amenities, operational performance, amenities, unit size, condition, number of bedrooms, and number of bathrooms, just to name a few.
It will vary, but this Summer I was seeing Class A caps 4.5-5%, B 5-5.5%, C 5.5-6%. These caps don't reflect the increasing interest rates, however. I suspect we will see them going up, but there is still a lot of cash flowing in from out of state. More cash dollars means less effect from interest rate increases. Still a tough market for buyers but I think it'll soften in the next 6 months.
