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Indianapolis Metro – Commercial Real Estate Investment Criteria – 3Q 2010

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Indianapolis Investment Criteria
Source:  Real Estate Research Corporation
Pre-Tax Yield (%) Going-In Cap Rate (%) Terminal Cap Rate (%)
RERC
Estimate
Midwest
Region
US RERC
Estimate
Midwest
Region
US RERC
Estimate
Midwest
Region
US
CBD 10.0 10.5 9.6 8.1 8.4 8.0 8.8 9.0 8.7
Suburban 10.5 10.7 10.1 8.7 8.8 8.4 9.2 9.3 9.0
Warehouse 9.9 10.3 9.9 8.5 8.8 8.3 9.0 9.3 8.9
R&D 10.3 10.6 10.1 8.8 8.9 8.6 9.2 9.4 9.2
Flex 10.4 10.6 10.3 8.6 8.8 8.6 9.2 9.3 9.2
Regional Mall 9.9 10.1 9.9 8.6 8.6 8.1 9.1 9.3 8.8
Power Center 10.1 10.1 10.1 8.5 8.5 8.3 9.2 9.3 9.1
Neigh/Comm. 10.4 10.6 10.1 8.7 9.0 8.5 9.4 9.6 9.1
Apartment 9.2 9.4 9.2 7.4 7.7 7.4 8.0 8.2 7.9
Hotel 11.4 11.4 11.6 9.8 10.0 9.5 10.4 10.7 10.1
Average 10.2 10.4 10.1 8.6 8.8 8.4 9.2 9.3 9.0

Written by Scott A. Baldwin

November 23, 2010 at 12:14 am

Posted in General

Indy Metro Investment Criteria 1Q 2009

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Source is Real Estate Research Corporation, respondent data.

Indianapolis Investment Criteria
  Pre-Tax Yield (%) Going-In Cap Rate (%) Terminal Cap Rate (%)
  RERC
Estimate
Midwest
Region
US RERC
Estimate
Midwest
Region
US RERC
Estimate
Midwest
Region
US
CBD 10.1 10.0 9.9 8.4 8.2 8.0 8.9 8.8 8.6
Suburban 10.7 10.4 10.3 8.9 8.5 8.3 9.3 9.1 8.9
Warehouse 9.9 9.8 9.8 8.5 8.3 8.1 8.9 8.9 8.6
R&D 10.3 10.2 10.2 8.7 8.6 8.3 9.2 9.2 8.9
Flex 10.3 10.1 10.2 8.8 8.5 8.4 9.2 9.1 8.9
Regional Mall 10.1 9.8 10.1 8.1 8.0 8.2 8.6 8.8 8.8
Power Center 10.3 10.0 10.3 8.6 8.2 8.3 9.1 8.9 8.9
Neigh/Comm. 10.1 10.3 10.4 8.5 8.5 8.4 8.9 9.0 9.0
Apartment 9.5 9.2 9.4 7.7 7.5 7.5 8.2 8.2 8.2
Hotel 12.2 11.8 11.6 10.0 9.6 9.4 10.5 10.2 10.0
Average 10.4 10.2 10.2 8.6 8.4 8.3 9.1 9.0 8.9

Written by Scott A. Baldwin

June 3, 2009 at 11:31 am

Indy Metro Transactions 1Q 2009

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Source is Real Estate Research Corporation, aggregate transaction data.Indianapolis, IN Transaction Data – 1Q 2009 – 12 Month Trailing
  < $5 million > $5 million All Midwest Regional Total National Total
Office
Volume (millions) $6 $135 $141 $6,067 $52,458
Size-Weighted Avg. ($/SF) $56 $123 $117 $140 $233
Price-Weighted Avg. ($/SF) $71 $130 $127 $196 $479
Median ($/SF) $68 $128 $128 $97 $134
Industrial
Volume (millions) $7 $252 $258 $4,485 $22,914
Size-Weighted Avg. ($/SF) $60 $48 $49 $56 $71
Price-Weighted Avg. ($/SF) $73 $54 $55 $147 $130
Median ($/SF) $43 $47 $46 $46 $73
Retail
Volume (millions) $15 $54 $69 $4,335 $25,529
Size-Weighted Avg. ($/SF) $173 $86 $97 $118 $141
Price-Weighted Avg. ($/SF) $205 $133 $149 $232 $265
Median ($/SF) $199 $153 $199 $92 $121
Apartment
Volume (millions) $10 $177 $187 $3,048 $28,816
Size-Weighted Avg. ($/unit) $26,958 $43,844 $42,445 $61,412 $89,086
Price-Weighted Avg. ($/unit) $40,384 $47,625 $47,244 $109,277 $181,791
Median ($/unit) $28,654 $42,849 $42,840 $47,000 $80,771
Hotel
Volume (millions) $756 $7,940
Size-Weighted Avg. ($/unit) $93,706 $133,574
Price-Weighted Avg. ($/unit) $322,713 $293,316
Median ($/unit) $50,000 $72,715
Source: RERC

Written by Scott A. Baldwin

June 3, 2009 at 11:25 am

Key Index Data

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We thought a few additional economic indices might be of use, and as requested.

Key Economic Rates

6-Month CDs 3.13 Jul 2008
Moody’s Baa 7.16 Jul 2008
Consumer Confidence 51.90 Jul 2008
Sources: Federal Reserve Board, The Conference Board

Selected NCREIF Returns

East Industrial Income Return 6.39 2Q08
West Industrial Income Return 5.55 2Q08
Midwest Retail Total Return 10.27 2Q08
Source: NCREIF

Selected RERC Survey Data

Nat. Neigh/Comm IRR 8.50 2Q08
Nat. Apartment IRR 8.30 2Q08
Nat. Sub Off Terminal 7.60 2Q08
Source: RERC

Selected Transaction Data

Midwest Hotel W.Avg $/Unit $122,812 2Q08
Midwest Industrial W.Avg $/SF $54 2Q08
National Retail W.Avg $/SF $153 2Q08
Unemployment Rate                                                                                                                                           6.5%


Written by Scott A. Baldwin

November 12, 2008 at 3:27 am

Indy Metro Investment Criteria 3Q 2008

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Capitalization rates have increased, in most all asset classes, for the Indy Metro Market.  We had been watching the multi-family investment criteria closely but it has also softened in the third quarter.

Indianapolis

3Q 2008
Indianapolis Investment Criteria
Pre-Tax Yield (%) Going-In Cap Rate (%) Terminal Cap Rate (%)
RERC
Estimate
Midwest
Region
US RERC
Estimate
Indianapolis
Survey
Midwest
Region
US RERC
Estimate
Midwest
Region
US
CBD 9.6 10.2 9.4 7.7 9.0 8.1 7.5 8.4 8.8 8.2
Suburban 9.8 10.1 9.6 8.0 9.0 8.2 7.8 8.6 8.8 8.4
Warehouse 9.2 9.9 9.3 7.8 8.5 8.2 7.6 8.3 8.8 8.3
R&D 9.4 10.3 9.7 8.0 9.0 8.6 8.0 8.5 9.2 8.6
Flex 9.5 9.5 9.6 8.0 9.0 8.0 7.9 8.6 8.7 8.5
Regional Mall 9.0 9.5 9.1 7.4 8.0 7.5 7.3 8.0 8.2 8.0
Power Center 9.4 9.6 9.4 7.8 8.5 7.8 7.6 8.4 8.4 8.2
Neigh/Comm. 9.7 10.3 9.5 8.1 9.0 8.4 7.8 8.6 9.0 8.5
Apartment 9.0 9.3 8.8 7.1 8.0 7.3 7.0 7.8 7.9 7.7
Hotel 10.4 11.1 10.6 8.9 11.0 9.3 8.8 9.5 9.7 9.4
Average 9.5 10.0 No Data 7.9 8.9 8.1 No Data 8.5 8.8 No Data

Written by Scott A. Baldwin

November 12, 2008 at 3:12 am

Indy Metro Transactions 3Q 2008

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Indianapolis, IN Transaction Data – 3Q 2008 – 12 Month Trailing
< $5 million > $5 million All Midwest Regional Total National Total
Office
Volume (millions) $15 $204 $218 $10,561 $97,521
Size-Weighted Avg. ($/SF) $46 $102 $94 $130 $241
Price-Weighted Avg. ($/SF) $75 $108 $105 $174 $456
Median ($/SF) $84 $128 $97 $107 $151
Industrial
Volume (millions) $4 $187 $191 $5,859 $32,117
Size-Weighted Avg. ($/SF) $41 $41 $41 $52 $71
Price-Weighted Avg. ($/SF) $43 $44 $44 $133 $126
Median ($/SF) $52 $44 $45 $50 $75
Retail
Volume (millions) $13 $75 $87 $5,728 $33,944
Size-Weighted Avg. ($/SF) $137 $112 $115 $140 $160
Price-Weighted Avg. ($/SF) $201 $152 $159 $348 $387
Median ($/SF) $116 $190 $147 $104 $137
Apartment
Volume (millions) $405 $411 $5,445 $58,388
Size-Weighted Avg. ($/unit) $49,241 $49,147 $65,744 $100,771
Price-Weighted Avg. ($/unit) $54,793 $54,637 $96,998 $190,045
Median ($/unit) $42,849 $42,849 $49,716 $83,925
Hotel
Volume (millions) $119 $122 $3,265 $33,090
Size-Weighted Avg. ($/unit) $151,490 $144,848 $143,431 $220,033
Price-Weighted Avg. ($/unit) $165,603 $162,702 $282,148 $629,828
Median ($/unit) $134,318 $134,318 $60,909 $104,651
Source: RERC

Written by Scott A. Baldwin

November 12, 2008 at 3:04 am

Indy Metro Investment Criteria 2Q 2008

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Source is Real Estate Research Corporation, respondant data.

Indianapolis
2Q 2008
Indianapolis Investment Criteria
Pre-Tax Yield (%) Going-In Cap Rate (%) Terminal Cap Rate (%)
RERC
Estimate
Midwest
Region
US RERC
Estimate
Midwest
Region
US RERC
Estimate
Midwest
Region
US
CBD 9.3 9.5 8.8 7.5 7.9 7.3 8.3 8.7 7.9
Suburban 9.5 9.9 9.2 8.0 8.1 7.5 8.4 8.6 8.1
Warehouse 9.1 9.5 9.1 7.7 8.2 7.5 8.1 8.5 8.1
R&D 9.3 9.8 9.4 8.0 8.4 7.8 8.4 8.8 8.5
Flex 9.2 9.7 9.3 7.9 8.3 7.7 8.3 8.8 8.3
Regional Mall 8.9 9.2 8.8 7.2 7.6 7.2 7.9 8.4 7.9
Power Center 9.2 9.3 8.9 7.7 7.9 7.4 8.3 8.5 8.1
Neigh/Comm. 9.2 9.3 9.1 7.8 8.2 7.6 8.4 8.7 8.3
Apartment 8.8 8.7 8.7 6.9 7.2 6.8 7.6 7.9 7.5
Hotel 10.2 10.3 10.5 8.3 8.6 8.6 9.1 9.4 9.3
Average 9.3 9.5 No Data 7.7 8.0 No Data 8.3 8.6 No Data

Wow, look at the Apartment estimate falling both nationally and locally!

Written by Scott A. Baldwin

September 23, 2008 at 10:59 pm