2015 Year End CLEVELAND CAPITAL MARKETS REPORT FOR THE INTELLIGENT INVESTOR
Capital Markets Report Table of Contents 3 Market Summary 4 Cap Rates by Property Type: Cleveland 5 Significant Recently-Completed Office Sales 6 Significant Recently-Completed Industrial Sales 7 Venture Capital Funding: Cleveland 10 Yesterday and Tomorrow: 2015 vs. 2016 29 Capital Markets Intelligence 30 S&P 500 vs. US NAREIT Returns 31 Top Buyers and Sellers 33 Cleveland Market Sales Volumes and Cap Rates 11 Economic Indicators 12 Unemployment Rates: Midwest Markets 13 Cleveland Historical Employment 19 Leasing Analysis 20 Availability & Rent: Cleveland Office 24 Availability & Rent: Cleveland Industrial 28 Commercial Development Pipeline 2015 CAPITAL MARKETS REPORT 2
2015 MARKET SUMMARY
2015 Capital Markets Intelligence Cap Rates by Property Type Cleveland Real Estate Market, 12 mos. rolling 8.0% 6.0% The gap between cap rates in Cleveland and major markets is decreasing. Strength continues to exist in all property types. 4.0% 2.0% 0.0% Multifamily Office Retail Industrial Source: Newmark Grubb Knight Frank; Real Capital Analytics; CoStar 2015 CAPITAL MARKETS REPORT 4
2015 Market Summary Significant Investment Sales Transactions Office 12 months rolling $190.47 P/P SF $138.63 P/P SF $112.89 P/P SF $126.69 P/P SF $110.29 P/P SF $99.68 P/P SF 3800 Embassy Pky. Fairlawn 8957 Canyon Falls Blvd Twinsburg 320 Springside Dr Montrose 25825 Science Park Dr Beachwood 1660 W 2 nd St Cleveland 600 Superior Ave E Cleveland Built in 2007 Class A 116,553 SF 1 building Portfolio sale 8.72% cap 100% occupied Strong tenant roster including University Hospitals Built between 2000-2008 Class B 94,316 SF 3 buildings Portfolio sale 8.70% cap Approximately 95% occupied 32,000 square feet of medical space in portfolio Built in 1995 Class B 97,000 SF 1 building 3 floors 100% occupied Built in 1989 Class A 88,802 SF 4 floors Purchased by Shelbourne Global Solutions LLC Approximately 90% occupied 8.48% cap Built in 1990 Class A 320,793 SF 12 floors Purchased by Hertz Investment Group Approximately 95% occupied 9.11% cap Built in 1991 Class A 508,397 SF 27 floors Purchased by Hertz Investment Group Approximately 81% occupied 2015 CAPITAL MARKETS REPORT 5
2015 Market Summary Significant Investment Sales Transactions Industrial 12 months rolling $68.82 P/P SF $65.81 P/P SF $60.23 P/PSF $60.09 P/P SF $59.55 P/P SF $43.40 P/P SF 5300 Majestic Parkway Bedford Heights 8220 Mohawk Drive Strongsville 8036 Bavaria Road Twinsburg 5455 N River Road West Geneva 1261 Highland Road Macedonia 1331 Kelly Avenue Akron Built in 1992 Class B 324,752 SF Sale leaseback 7.27% cap 100% occupied Built in 2000 Class B 77,500 SF 15,000 SF office 100% occupied Built in 1994 (renovated in 2000) Class C 39,019 SF Two buildings 8.1% cap 100% occupied 7-year lease Built in 1979 (renovated in 2008) Class B 239,454 SF Two buildings 9.0% cap 100% occupied 10-year lease Built in 2008 Class A 201,519 SF 100% occupied 8.4% cap Built in 1994 212,000 SF Class B 10.0% cap 100% occupied 2015 CAPITAL MARKETS REPORT 6
2015 Market Analysis 2015 Venture Capital Investment Ohio 2015 Investments 2014-2015 Comparable Market Venture Capital Investments State Deals 3Q14 Investment Deals 3Q15 Investment ViewRay Inc Oakwood Village $104M ChanRX Cleveland $13.5M IL 25 $145,758,600 23 $145,849,800 PA 45 $171,748,000 45 $146,626,200 OH 17 $94,790,100 14 $89,198,000 MN 10 $88,918,100 7 $74,814,000 Juventas Cleveland $13.5M StreamLink Cleveland Neuros Willoughby TN 22 $20,996,900 21 $68,095,000 MI 8 $18,521,000 16 $147,018,000 7Signal Akron DecisionDesk Lakewood Ahology Cincinnati GenomOncology Cleveland MO 14 $62,090,000 18 $116,439,700 WI 6 $20,104,100 1 $12,000,000 IN 5 $12,550,100 5 $28,580,000 Source: Newmark Grubb Knight Frank, PricewaterhouseCoopers /National Venture Capital Association MoneyTree Report 2015 CAPITAL MARKETS REPORT 7
2015 Market Analysis Ohio Venture Capital Funding Ohio 2000-2015 Investments $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 100 80 60 40 20 Ohio Investments Year Deals Investment 2001 45 $249,179,800 2002 51 $266,030,800 2003 32 $193,927,600 2004 37 $89,945,300 2005 38 $136,477,400 2006 43 $89,845,900 2007 67 $227,234,000 2008 64 $250,308,100 2009 58 $110,743,900 2010 62 $214,499,700 2011 69 $169,486,400 $0 0 2012 56 $266,578,500 2001 2002 2003 2004 2007 2006 2005 Investment 2008 2009 Deals 2010 2011 2012 2013 2014 2015 YTD 2013 78 $254,144,500 2014 65 $267,821,800 2015 YTD 50 $207,891,600 Source: Newmark Grubb Knight Frank; PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report 2015 CAPITAL MARKETS REPORT 8
2015 Market Analysis Ohio Biotechnology Venture Capital Funding Ohio 2000-2015 Investments $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 12 10 8 6 4 2 Ohio Biotechnology VC Funding Year % of Total Investment 2001 5.8% 2002 7.4% 2003 16.1% 2004 15.6% 2005 10.5% 2006 11.5% 2007 7.1% 2008 4.0% 2009 0.9% 2010 5.4% 2011 16.1% $0 0 2012 16.6% 2001 2002 2003 2004 2005 2006 2007 Investment 2008 2009 Deals 2010 2011 2012 2013 2014 2015 YTD 2013 10.1% 2014 15.3% 2015 YTD 26.9% Source: Newmark Grubb Knight Frank, PricewaterhouseCoopers /National Venture Capital Association MoneyTree Report 2015 CAPITAL MARKETS REPORT 9
2015 Market Summary Yesterday and Tomorrow 2015 2016 BUILDING CONVERSIONS/RENOVATIONS Hubbard Cooke Building Templin Bradley Lofts Schofield Cleveland Board of Education 925 Euclid Cleveland Athletic Club Halle Building 1750 Euclid CONSTRUCTION DELIVERIES ACTIVE INVESTORS FlatsEastBank Phase II CornerStone Bluestone Business Park China Canada Middle East Core Funds REITs Chagrin Highlands Arhaus NuCLEus Hilton Hotel Canada Middle East Core Funds REITs China Japan LEASING URS Dealer Tire Benesch RNC ThompsonHine PricewaterhouseCoopers Fifth Third McDonald Hopkins S&P Data Clear Channel Communications Walter & Haverfield LLP Fleetmatics DOMINANT LEASING INDUSTRY SECTOR Legal Services Finance RETAIL NineTwelve NineTwelve HOT MARKET CBD CBD 2015 CAPITAL MARKETS REPORT 10
2015 ECONOMIC INDICATORS
5.4% 5.0% 4.9% 4.8% 4.6% 4.4% 4.2% 4.2% 4.0% 4.0% 2015 Economic Indicators Unemployment Rates 4Q, by Combined Statistical Area 6.0% 5.5% 5.0% 4.5% At 4.0%, Cleveland s unemployment rate is one of the lowest in the region, and significantly below the national average. Cleveland s unemployment rate has dropped a significant 260 basis points over the past 12 months. 4.0% 3.5% 3.0% Source: Newmark Grubb Knight Frank; U.S. Bureau of Labor Statistics 2015 CAPITAL MARKETS REPORT 12
2015 Economic Indicators Total Nonfarm Employment Cleveland MSA 1,080,000 Cleveland s job growth continues to increase steadily, while being slightly 1,060,000 outpaced by the US average. 1,040,000 1,020,000 1,000,000 980,000 960,000 940,000 920,000 2010 2011 2012 2013 2014 2015 Source: Bureau of Labor Statistics, CES 2015 CAPITAL MARKETS REPORT 13
2015 Economic Indicators Total Nonfarm Employment Growth Cleveland MSA vs. US 12.0% 10.0% Cleveland continues to gain more jobs, although at a slower rate than the US average. 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2011 2012 2013 2014 2015 %chg, CLE %chg, US Source: Bureau of Labor Statistics, CES 2015 CAPITAL MARKETS REPORT 14
2015 Economic Indicators Office-Using Employment Cleveland MSA 235,000 Office employment is defined by professional and business services, 230,000 225,000 financial services and information employment sectors. Cleveland s MSA has seen substantial recovery in office-using 220,000 employment since the recession, but is still not at pre-recession levels.. 215,000 210,000 205,000 200,000 2010 2011 2012 2013 2014 2015 Source: Bureau of Labor Statistics, CES 2015 CAPITAL MARKETS REPORT 15
2015 Economic Indicators Office-Using Employment Growth Cleveland MSA vs. the US 14.0% 12.0% 10.0% 8.0% Office employment growth in the Cleveland MSA has leveled out throughout the year of 2015, while the US continues to add jobs in this sector. 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2011 2012 2013 2014 2015 %Chg CLE % chg US Source: Bureau of Labor Statistics, CES 2015 CAPITAL MARKETS REPORT 16
2015 Economic Indicators Total Manufacturing Employment Cleveland MSA 128,000 126,000 124,000 122,000 120,000 118,000 Cleveland s manufacturing industry had been on the decline for decades. However, since the recession,the MSA is showing steady employment growth in this super sector, mostly in the form of advanced manufacturing and medical devices. 116,000 114,000 112,000 110,000 2010 2011 2012 2013 2014 2015 Source: Bureau of Labor Statistics, CES 2015 CAPITAL MARKETS REPORT 17
2015 Economic Indicators Manufacturing Employment Growth Cleveland MSA vs. the US 7.0% 6.0% 5.0% Cleveland has been on pace, and oftentimes, has eclipsed the US average in job growth since the recession. 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% 2011 2012 2013 2014 2015 %chg CLE %chg US Source: Bureau of Labor Statistics, CES 2015 CAPITAL MARKETS REPORT 18
2015 LEASING ANALYSIS
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 2015 Leasing Analysis Overall Asking Rent and Vacancy Rate Cleveland Office $19.50 $19.00 $18.50 25.0% 22.5% Positive absorption via strong leasing in the East submarket Law firms are downsizing into more efficient and more expensive Class A space $18.00 20.0% $17.50 17.5% $17.00 $16.50 15.0% $16.00 12.5% Rent (Price/SF) Vacancy Rate Source: Newmark Grubb Knight Frank 2015 CAPITAL MARKETS REPORT 20
2015 Leasing Analysis Overall Asking Rent by Comparable Markets - Office $25.00 $22.50 $20.00 $17.50 $15.00 Cleveland Columbus Pittsburgh Detroit $12.50 $10.00 Source: Newmark Grubb Knight Frank 2015 CAPITAL MARKETS REPORT 21
2015 Leasing Analysis Overall Asking Rent by Submarket Cleveland Office $19.00 Southwest saw jump in asking rates as large block of Class A $18.00 space entered the market for the first time since 2010 $17.00 $16.00 $15.00 CBD East South Southwest West CBD average asking rents will continue to increase as Class C space is converted to multi-family and hotel $14.00 $13.00 $12.00 13/4Q 14/1Q 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q 15/3Q 15/4Q Source: Newmark Grubb Knight Frank 2015 CAPITAL MARKETS REPORT 22
2015 Leasing Analysis Vacancy Rate and Average Asking Rent - Office DOWNTOWN 19.7% $18.02 Class A 15.5% $21.66 Class B 22.0% $17.31 Class C 22.7% $14.29 EAST 17.1% $17.88 Class A 12.3% $20.92 Class B 17.7% $16.43 Class C 37.7% $16.26 SOUTH 12.9% $18.11 Class A 12.2% $19.88 Class B 13.6% $16.53 Class C 13.6% $13.76 SOUTHWEST 13.8% $16.24 Class A 10.7% $19.15 Class B 16.8% $13.27 Class C 12.9% $10.99 WEST 16.6% $13.70 Class A Class B Class C 8.9% $16.78 24.6% $13.18 17.0% $11.09 2015 CAPITAL MARKETS REPORT 23
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 2015 Leasing Analysis Overall Asking Rent and Vacancy Rate Cleveland Industrial $4.15 $3.95 14.0% 12.0% Positive absorption via strong leasing in the submarkets south of Cleveland. Vacancy peaked in the first quarter of 2011 at 12.7%. $3.75 10.0%. $3.55 8.0% $3.35 6.0% $3.15 4.0% Rent (Price/SF) Vacancy Source: Newmark Grubb Knight Frank 2015 CAPITAL MARKETS REPORT 24
2015 Leasing Analysis Overall Asking Rent by Comparable Markets - Industrial $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 Cleveland Columbus Pittsburgh Detroit $2.50 $2.00 $1.50 Source: Newmark Grubb Knight Frank 2015 CAPITAL MARKETS REPORT 25
2015 Leasing Analysis Overall Asking Rent by Submarket Cleveland Industrial $5.50 $5.00 $4.50 Markets south of Cleveland pace the market in due to proximity to freeways and abundance of Class A ESFR buildings. Downtown rents have begun to $4.00 $3.50 $3.00 Downtown Northeast Northwest Southcentral Southeast Southwest plateau following the demolition or conversion of older assets. $2.50 $2.00 $1.50 13/4Q 14/1Q 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q 15/3Q 15/4Q Source: Newmark Grubb Knight Frank 2015 CAPITAL MARKETS REPORT 26
2015 Leasing Analysis Vacancy Rate and Average Asking Rent Industrial Northwest Southwest Downtown Southcentral Northeast Southeast DOWNTOWN 8.1% $3.22 Warehouse 15.1% $2.31 General Industrial 6.6% $3.77 NORTHEAST 8.3% $3.32 Warehouse 7.1% $3.29 General Industrial 8.7% $3.14 NORTHWEST 11.2% $3.39 Warehouse 2.2% $4.26 General Industrial 13.9% $3.23 SOUTHCENTRAL 8.5% $4.97 Warehouse 6.4% $4.67 General Industrial 9.8% $4.00 SOUTHEAST 5.7% $4.72 Warehouse 5.8% $3.95 General Industrial 5.2% $5.06 SOUTHWEST 4.6% $4.94 Warehouse 3.4% $4.60 General Industrial 4.8% $4.50 2015 CAPITAL MARKETS REPORT 27
2015 Leasing Analysis Commercial Development Pipeline Cleveland Hilton Convention Center Hotel $272 Million Drury Hotel $35 Million Expected delivery (2015-2017): 5.28 MSF More than $1 billion in development CAC Conversion $52.3 Million Kimpton Hotel $50 Million Source: Newmark Grubb Knight Frank Horseshoe Casino Phase II $650 Million nucleus $400 Million 925 Euclid Avenue Redevelopment $280 Million 2015 CAPITAL MARKETS REPORT 28
2015 CAPITAL MARKETS INTELLIGENCE
2015 Capital Markets Intelligence S&P 500 vs. US NAREIT Returns 160.0% 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -20.0% -40.0% -60.0% 2009 2010 2011 2012 2013 2014 2015 Growth REIT Growth S&P Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 30
2015 Capital Markets Intelligence Top Buyers and Sellers - Past 24 Months Cleveland Market- All Commercial Top Buyers (prior 24 months) Rank Buyer Location Acq $ (mil) # Props Avg Price $ (mil) # Props 1 Devonshire REIT Whitehouse, OH 110.3 3 36.8 31 2 Hertz Group Santa Monica, CA 88.8 2 44.4 55 3 DRA Advisors New York, NY 58.4 6 9.7 807 4 Phillips Edison Grocery Center REIT II Cincinnati, OH 56.6 4 14.2 61 5 Hutensky Capital Partners Hartford, CT 47.1 1 47.1 21 6 Hornig Capital Partners Great Neck, NY 47.1 1 47.1 3 7 B&D Holdings Watchung, NJ 47.1 1 47.1 5 8 Inland Real Estate Corp Oak Brook, IL 43.7 2 21.9 265 9 PGGM Zeist, Netherlands 43.7 2 21.9 219 10 Alex. Brown Realty Baltimore, MD 43.1 9 4.8 97 11 Biynah Industrial Partners Minneapolis, MN 43.1 9 4.8 33 12 NorthStar Realty Finance New York, NY 36.8 5 7.4 763 Top Sellers (prior 24 months) Rank Seller Location Disp $ (mil) # Props Avg Price $ (mil) # Props 1 Forest City Cleveland, OH 102.5 3 34.2 138 2 Visconsi Cos Cleveland, OH 101.8 3 33.9 25 3 Inland Real Estate Corp Oak Brook, IL 58.4 6 9.7 296 4 TIER REIT Dallas, TX 53.4 1 53.4 22 5 Mazel Company Solon, OH 43.1 9 4.8 11 6 Harbor Group Int'l Norfolk, VA 43.1 9 4.8 157 7 Chelm Properties Inc Solon, OH 43.1 9 4.8 9 8 First Interstate Properties Cleveland, OH 35.8 2 17.9 3 9 Wolf RE Mgmt Beachwood, OH 34.7 1 34.7 3 10 LaSalle Investment Chicago, IL 33.3 1 33.3 915 11 Sovereign Capital New York, NY 31.0 1 31.0 1 Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 31
2015 Capital Markets Intelligence Buyer Types Cleveland Market - All Commercial 39% 28% 4% 14% 12% 4% 7% 10% 12% 4% 21% 24% 48% 59% 29% 34% 7% 11% 24% 10% 2012 2013 2014 2015 User/Other Private Public Listed/REITs Cross-Border Institutional Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 32
2015 Capital Markets Intelligence Past 12 Months Sales Volume by Property Type Cleveland Market The majority of Cleveland investment transactions in the Hotel $116,079,919 10% past 12 months have occurred in the office sector, followed by retail, apartments, industrial, and hotels. Industrial $164,174,946 15% Office $303,897,372 27% Retail $268,406,921 24% Apartment $273,991,087 24% Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 33
2015 Capital Markets Intelligence Historical Office Building Sales Cleveland Market Price Per SF, 12-Month Moving Average $200.00 $180.00 $160.00 Cleveland office building prices took a major hit during the recession, but since have seen moderate growth. $140.00 $120.00 $100.00 $80.00 $60.00 $63.00 $40.00 $20.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 34
Dollars (Millions) Square Feet (Millions) 2015 Capital Markets Intelligence Historical Office Building Sales Cleveland Market Sales Volume, 12-Month Moving Average ($s and square feet) $600 14 $500 12 $400 10 8 $300 6 $200 4 $100 2 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 - Total Square Feet Sold Sales Volume ($) Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 35
2015 Capital Markets Intelligence Historical Industrial Building Sales Cleveland Price Per SF, 12-Month Moving Average $70.00 Although industrial building prices $60.00 $57.00 have remained stable in the past 12 months, there continues to be a major rebound in pricing since the recession. $50.00 $40.00 $30.00 $20.00 $10.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 36
Dollars (Millions) Square Feet (Millions) 2015 Capital Markets Intelligence Historical Industrial Building Sales Cleveland Market Sales Volume ($s and square feet), 12-Month Totals and Moving Average $600 14 $500 12 $400 10 $300 8 6 $200 4 $100 2 $- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Square Feet Sold Sales Volume ($) - Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 37
2015 Capital Markets Intelligence Historical Apartment Building Sales Cleveland Price Per Unit, 12-Month Moving Average $65,000 $60,000 $55,000 Even though Cleveland apartment values continue to rise quickly in the CBD, the region as a whole has seen a decline in pricing since 2013. $50,000 $45,000 $40,000 $40,525 $35,000 $30,000 $25,000 $20,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 38
Dollars (Millions) 2015 Capital Markets Intelligence Historical Apartment Building Sales Cleveland Market Sales Volume, 12-Month Totals and Moving Average ($s and units) $400 10,000 $350 $300 $250 9,000 8,000 7,000 6,000 $200 5,000 $150 $100 $50 4,000 3,000 2,000 1,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 - Volume ($) Total Units Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 39
2015 Capital Markets Intelligence Historical Industrial Cap Rates Major Metros v. Midwest 10.0% 9.5% 9.0% Cap rates in the Midwest continue to divert from major markets, with a current spread of 1.7%. 8.5% 8.0% 7.8% 7.5% 7.0% 6.5% 6.1% 6.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 RCA - US Midwest Industrial Cap Rate 6 Major Metros Industrial Cap Rate Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 40
2015 Capital Markets Intelligence Historical Office Cap Rates Major Metros v. Midwest 9.50% 9.00% 8.50% The cap rate spread between the Midwest and Major Markets is currently at 1.8%. 8.00% 7.50% 7.70% 7.00% 6.50% 6.00% 5.50% 5.90% 5.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 RCA - US Midwest Office Cap Rate 6 Major Metros Office Cap Rate Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 41
2015 Capital Markets Intelligence Historical Apartment Cap Rates Major Metros v. Midwest 9.00% 8.50% 8.00% The Cap rate spread between the Midwest and Major Markets is currently at 1.8%. 7.50% 7.00% 6.50% 6.00% 6.70% 5.50% 5.00% 4.50% 4.90% 4.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6 Major Metros Apartment Cap Rate RCA - US Midwest Apartment Cap Rate Source: Newmark Grubb Knight Frank; Real Capital Analytics 2015 CAPITAL MARKETS REPORT 42
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