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Historical CAP Rates & $/SF in the Puget Sound January 15, 2010

Posted by Erik Swanson in Research/Data.

Although there have been relatively few comparable sales, the retail investment market has seen a nearly 200 basis point rise in CAP rates since the low 6% CAP market bottom in 2006.  In 2009, there were less than 20 multi-tenant sales and although the CAP rates averaged 7.6%, recent closings have CAP rates exceeding 8%.  We believe market fundamentals will continue pushing the Puget Sound market to historical averages with CAP rates settling near 8.75%.

Average sales price per square foot peaked in 2008 at nearly $300 per square foot. But as shown in the chart below the average sales price per square foot fell precipitously.  2009 saw a nearly 32% decline to an average near $200 per square foot due as buyers sought investments with greater upside.



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