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| Sapperstein & Associates, LLC 7920 Norfolk Ave, Suite 220 Bethesda, MD 20814 301-654-0214 Fax: 301-654-0272 Email: appraisal@sapperstein.net |
Newsletter
A Slow and Weak Recovery
According to many statistics published by the Federal Government and
articles by reputable publishers the recession officially ended in June 2009.
Yet it has been our observation that capitalization rates for nearly all
property sectors have increased over the past 21 months. Indeed, some
sectors have been impacted worse than others.
Through the entire crisis, multifamily property has remained fairly
consistent in cap rate expectation. Why? The previous economic boom
proved that there is a segment of the population that will continue to rent
versus buy.... regardless of interest rates.
We expect this pattern to continue as interest rates trend upward,
coupled with stricter lending practices, thus narrowing the market for
potential buyers. Current cap rates in preferred investment-attractive
locations are ranging from 5.5% to 6.5%.
Capitalization rates for generic commercial property in the Washington-
Baltimore markets are up anywhere from ½% to 1 ½ % based on
investors with whom we have interviewed. The general consensus is that
the outlook for the future remains guarded.
For assets that remain on the books of lenders or on their “watch list,” a
tax appeal is a good tactic to help enhance the net operating income and
depressed lending coverage ratio. Attorneys can directly benefit from this
by actively engaging banks, private lenders, and appraisers.
Sapperstein & Associates, LLC is an active appraisal entity in nearly all
disciplines. We encourage you to discuss with us whatever your needs
may be, i.e. estate planning, date of death valuations, tax appeals,
refinancing, buying, selling, due diligence appraisals, etc.
We invite you to call us to gain information about our firm, areas of
discipline, and areas of coverage. There is no substitute for experience.
Regards,
Gary Lee Sapperstein, MAI, SRPA
Sapperstein & Associates, LLC
Managing Member
A Slow and Weak Recovery
According to many statistics published by the Federal Government and
articles by reputable publishers the recession officially ended in June 2009.
Yet it has been our observation that capitalization rates for nearly all
property sectors have increased over the past 21 months. Indeed, some
sectors have been impacted worse than others.
Through the entire crisis, multifamily property has remained fairly
consistent in cap rate expectation. Why? The previous economic boom
proved that there is a segment of the population that will continue to rent
versus buy.... regardless of interest rates.
We expect this pattern to continue as interest rates trend upward,
coupled with stricter lending practices, thus narrowing the market for
potential buyers. Current cap rates in preferred investment-attractive
locations are ranging from 5.5% to 6.5%.
Capitalization rates for generic commercial property in the Washington-
Baltimore markets are up anywhere from ½% to 1 ½ % based on
investors with whom we have interviewed. The general consensus is that
the outlook for the future remains guarded.
For assets that remain on the books of lenders or on their “watch list,” a
tax appeal is a good tactic to help enhance the net operating income and
depressed lending coverage ratio. Attorneys can directly benefit from this
by actively engaging banks, private lenders, and appraisers.
Sapperstein & Associates, LLC is an active appraisal entity in nearly all
disciplines. We encourage you to discuss with us whatever your needs
may be, i.e. estate planning, date of death valuations, tax appeals,
refinancing, buying, selling, due diligence appraisals, etc.
We invite you to call us to gain information about our firm, areas of
discipline, and areas of coverage. There is no substitute for experience.
Regards,
Gary Lee Sapperstein, MAI, SRPA
Sapperstein & Associates, LLC
Managing Member
