Cap rate trends are on the rise, indicating shifting dynamics in the underwriting landscape. This is the conclusion of a CRED iQ analysis of key metrics for new CMBS conduit lending in Q4 2024 compared to Q3 2024 performance. This analysis encompassed 819 properties across 284 loans, resulting in over $7 billion in loan originations for securitizations.

The increase in cap rates is notable across various property types. Office cap rates ranged from 4.60% to 10.50%, with an average of 7.40%, up from 7.16% in Q3 2024. Multifamily cap rates fell between 3.90% and 7.60%, averaging 5.90%, a slight increase from the previous quarter's average of 5.77%.

In the retail sector, cap rates ranged from 5.00% to 9.10%, averaging 6.70%, compared to 6.45% in Q3. Industrial assets saw cap rates between 5.20% and 7.70%, with an average of 6.40%, up from 6.24%. Self-storage cap rates ranged from 5.30% to 7.60%, averaging 6.20%, an increase from Q3's average of 5.86%. However, hotel cap rates were the only category to experience a decline, ranging from 3.30% to 10.60% and averaging 7.30%, down from an average of 7.80% in Q3.