Commercial property acquisitions up in Silicon Valley
Silicon Valley/San Jose Business Journal - 9:04 AM PST Thursday
Commercial real estate investors acquired more than $5.6 billion in
That contrasted with an overall decline in the pace of
Investors put up about $16.3 billion to buy apartments, offices, shopping centers and industrial buildings from
The level of interest fell off in every property category, with the steepest decline in dollars spent to buy apartments, off slightly more than $1 billion to $3.4 billion in 2006.
Capitalization rates, or cap rates, a measure of first-year yield, also continued to fall by and large, though not across the board. In perhaps the most-startling example, investors were willing to accept a 4.9 percent return on
Falling cap rates have been a subject of much investor interest in recent years, as buyers continued to pay increasingly higher prices for the income properties produced, compressing cap rates to the low and lower single digits.