US Cap Rate Benchmarks by Metro Market & Property Type
Aggregated capitalization rate ranges across primary asset classes and metropolitan market tiers based on 2026 industry surveys.
Market Data Disclaimer
Cap rates shift with market conditions. These ranges reflect aggregated industry survey data as of mid-2026 and are directional benchmarks only — always verify current pricing with a local broker or recent comparable sales before making investment decisions.
US Cap Rate Benchmarks by Asset Class
Aggregated 2026 valuation benchmarks across major commercial subtypes
| Property Type / Asset Subtype | Typical Cap Rate Range (2026) | Market Dynamics & Underwriting Notes |
|---|---|---|
| Multifamily – Class A (Primary Markets) | 4.50% – 5.25% | Tightest of all asset classes; institutional capital favors this sector |
| Multifamily – Class B (Secondary Markets) | 5.50% – 7.00% | Most common range for typical value-add multifamily deals |
| Multifamily – Class C (Tertiary Markets) | 7.00% – 9.00%+ | Higher yield, higher operational and vacancy risk |
| Industrial – Class A / Bulk Distribution | 5.00% – 6.50% | One of the most resilient sectors post-2022 rate cycle |
| Industrial – Single-Tenant Net Lease | 5.00% – 5.75% | Tightest industrial subtype, driven by tenant credit quality |
| Industrial Flex / Outdoor Storage (IOS) | 6.50% – 9.00% | Wider range reflects tenant and lease-term variability |
| Office – Class A | ~8.4% (national average) | Elevated post-pandemic; trophy CBD assets in gateway markets can trade materially tighter (6.0%–7.0%) |
| Office – Class B | ~8.7% (national average) | Wider pricing spread reflecting tenant migration to quality |
| Office – Class C | ~9.0%+ (national average) | Distressed pricing common in secondary/tertiary markets |
| Retail – Grocery-Anchored Centers | 5.75% – 6.50% | Most in-demand retail subtype currently |
| Retail – Unanchored Strip Centers | 7.00% – 9.00% | Wide range depending on tenant mix and lease terms |
| Net Lease – Investment-Grade Single Tenant | 5.00% – 6.00% | Priced more like a bond; tenant credit rating drives pricing |
| Hotel – Luxury / Full-Service | ~6.50% | Tighter pricing driven by leisure and premium travel demand |
| Hotel – Suburban / Select-Service | ~7.85% | Balanced yield profile for regional hotel operators |
| Hotel – Economy / Limited-Service | ~8.60% | Overall hotel sector average ≈ 8.2% |
| Self-Storage – Class A (Primary Markets) | 5.00% – 6.00% | Compressed close to multifamily for high-quality assets |
| Self-Storage – Class B (Secondary Markets) | 6.00% – 7.00% | Steady cash flow with value-add operational upside |
| Self-Storage – Class C (Tertiary Markets) | 7.00% – 7.50%+ | Higher yields compensating for smaller population catchments |
| Medical Office | 6.00% – 7.50% | Long leases and strong tenant credit support pricing |
| Data Centers | 4.00% – 5.00% | Compressed sharply due to AI/cloud infrastructure demand; among the tightest cap rates of any commercial asset class |
Cap Rate Variations by Metro Market Tier
Industry standards describe relative pricing variations across metropolitan areas using Market Tiers rather than prescribing static numbers per city. Gateway markets command tighter cap rates (75–150 bps lower), while tertiary markets trade wider to compensate for liquidity constraints.
| Market Tier | Representative Metros | Typical Pricing vs. National Average |
|---|---|---|
| Tier 1 – Gateway Markets | New York City, Los Angeles, San Francisco Bay Area, Boston, Washington D.C., Chicago, Seattle, San Diego, Miami | 75–150 bps tighter (lower cap rate) than tertiary markets; deepest capital pools, highest barriers to entry |
| Tier 2 – Major Secondary Markets | Austin, Dallas–Fort Worth, Houston, Atlanta, Denver, Phoenix, Nashville, Charlotte, Minneapolis, Philadelphia, Portland (OR) | Roughly at or slightly above national average; strong liquidity, sunbelt markets often see continued institutional capital inflow |
| Tier 3 – Growth / Emerging Secondary Markets | Raleigh–Durham, Orlando, Tampa, Salt Lake City, San Antonio, Sacramento, Las Vegas, Columbus, Indianapolis, Kansas City | Modestly wider than Tier 2, typically 25–75 bps above national average |
| Tier 4 – Tertiary Markets | Smaller metros not listed above (e.g., Memphis, Louisville, Oklahoma City, Fresno, Albuquerque) | Typically 150–250+ bps wider than Tier 1 gateway markets; thinner liquidity, longer lease-up timelines |
Frequently Asked Questions
Why don't you give an exact cap rate number for my specific city?
Precise, city-specific cap rate data for every property type is generally proprietary — it comes from paid databases like CoStar, Real Capital Analytics (RCA), or a local broker's active pipeline of comparable sales. Public industry surveys (like CBRE's) report at the market-tier or major-metro level, not for every individual city. This guide gives you a realistic starting range; from there, a local broker can help you refine it based on recent closed transactions.
How often does this data change?
Cap rates are one of the more volatile metrics in commercial real estate — they move with interest rates, capital flows, and sector-specific sentiment. Major surveys like CBRE's Cap Rate Survey are published twice a year (roughly January and July), and this guide will be updated accordingly. Don't rely on cap rate data older than 6-12 months for an active deal.
Why is office so much wider than other property types?
Office has faced the most disruption from remote/hybrid work trends since 2020, leading to elevated vacancy in many markets and a wide gap between high-quality "trophy" assets (which still command strong pricing) and older, undifferentiated buildings (which have seen dramatic cap rate expansion, sometimes into double digits).
Data Sources & Citations
- CBRE, U.S. Cap Rate Survey H2 2025
- CBRE, U.S. Real Estate Market Outlook 2026
- Newmark, 2026 Valuation & Advisory North American Market Survey
- Nareit, Q1 2026 REIT Industry Tracker
- Marcus & Millichap / Green Street self-storage market data, 2026
- CRED iQ, CMBS-based cap rate trend data
- Aggregated commercial brokerage valuation benchmarks (Cauble Group, CommercialCalc, Commercial Lending Solutions, 2026)