Tighter lending standards and distress expected, says CBRE

The second half of 2023 was a volatile period for bond markets, with yields peaking at 5 percent in October 2023 before falling back below 4 percent by year-end, according to CBRE in its cap rate survey for second half 2023.

This rise in bond yields was a headwind to deal flow and caused cap rate expansion to accelerate relative to the first half of 2023. The average cap rate increased from 6.4 percent to 7 percent in the second half of 2023, with expansion across multiple property types.

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