What REALLY Drives Real Estate Cap Rates [& Why]

What REALLY Drives Real Estate Cap Rates [& Why] // There are a lot of different factors that play into real estate cap rates, but with the changes in interest rates we’ve seen over the last two years (and especially over the last few months), there are a lot of expectations today around how these most recent changes will affect the CRE market. So in this video, I want to talk through two of the biggest drivers of cap rates in the commercial real estate market, how (and why) interest rates end up playing into these, and why commercial real estate values might still take a while to recover even if the Fed funds rate continues to drop. 💻 TRAINING & COURSES 💻 Enroll in the FREE Break Into CRE Real Estate Financial Modeling Crash Course here: https://www.breakintocre.com/free-cra... Enroll in any Break Into CRE course here: https://breakintocre.com/courses/ Get access to all Break Into CRE courses, all models, and additional one-on-one support with a Break Into CRE Academy membership: https://breakintocre.com/the-academy **💰 MY FAVORITE REAL ESTATE INVESTMENT PLATFORMS 💰 EquityMultiple: https://equitymultiple.4drrzr.net/c/2... RealtyMogul: https://realtymogul.pxf.io/c/2975738/... ** 📰 MY FAVORITE REAL ESTATE NEWSLETTER 📰 Thesis Driven (20% off a paid subscription): https://www.thesisdriven.com/breakint... ** 🏬 RESIDENTIAL RENT DATA & ESTIMATES 🏬 RentCast: https://rentcast.io?via=breakintocre 🕒 Timestamps 🕒 0:00 Introduction 0:48 Cap Rate Math 1:38 Driver One 5:01 Driver Two #commercialrealestate #commercialrealestateinvesting *Nothing in this video should be construed as tax, legal, accounting, valuation, or financial advice or recommendation. All information in this video is intended solely for educational purposes, and you are advised to consult with your own personal professional advisors regarding your personal investment decisions. **AFFILIATE DISCLOSURE: Some of the links in this description are affiliate links, meaning, at no additional cost to you, we may earn a commission if you click through and make a purchase and/or create an account. Research and articles referenced in this video: https://www.fanniemae.com/research-an.... https://www.nytimes.com/2024/09/30/bu.... https://www.cbre.com/insights/reports... https://therealdeal.com/chicago/2024/... https://bam.brookfield.com/press-rele... https://www.blackstone.com/news/press... https://www.jpmorgan.com/insights/rea... https://www.oecd.org/en/data/indicato... https://fred.stlouisfed.org/series/DGS10 https://fred.stlouisfed.org/series/SO... https://www.chathamfinancial.com/tech... https://www.cbre.com/insights/briefs/... https://www.globest.com/2024/10/14/ca... https://www.marketwatch.com/story/the... https://mf.freddiemac.com/docs/produc... https://www.businesstimes.com.sg/inte... https://www.perenews.com/invesco-sove... https://www.cnbc.com/2024/09/10/jamie... https://www.bisnow.com/atlanta/news/m... https://www.bisnow.com/new-york/news/... https://therealdeal.com/texas/dallas/...