Intelligent Investment

Commodity Office Stock is Tough to Price These Days

Chart of the Week

March 25, 2025 2 Minute Read

Image of a computer screen displaying a Gantt chart illustrating project planning and management, relevant to commercial real estate.

Receive EA Insights Directly in your Inbox

CBRE’s Cap Rate Surveys1 shed light on both the average cap rate and the spread between the lowest and highest estimates. For example, if the lowest expected cap rate for a sector is 6% and the highest is 7%, the spread is 1. As you can see, for office assets, the spread has widened considerably compared with other sectors. This suggests greater uncertainty around office pricing, particularly for Class B and C assets where fundamentals and financial performance have deteriorated significantly more.

1 CBRE surveys its valuations and capital markets professionals twice a year to gauge their opinion on current and future asset pricing.

Figure 1: Average Spread in Cap Rates across Sectors (Percentage Points)

Commercial real estate market performance graph: 2009-2024 trends for industrial, office (classes A, B, C), multifamily, and retail sectors.

Source: CBRE Econometric Advisors.

Contacts