The industrial sector saw the most cap rate compression in the second half of 2021, driven by skyrocketing e-commerce sales, helping the real estate capital markets end the year on a high note. 

"Cap rates declined across the real estate spectrum," CBRE analysts write in a new report analyzing the firm's most recent Cap Rate Survey, which was conducted before the Russian invasion of Ukraine. "The industrial sector's super-charged rent growth amid the pandemic meant this segment accounted for the greatest decline in yields during the past year, regardless of class (e.g., A, B) or risk profile (e.g., Stabilized, Value-Add)."

The firm noted "little concern about the burgeoning development pipeline" among respondents, with 94% saying they believe heavy development will not hamper NOI growth and investment capital and pointing to very low cap rate levels in Riverside, Phoenix and Dallas, as well as supply-constrained port markets like Los Angeles, Oakland, and Northern New Jersey.