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Broker in Aurora told me cap rates are lying, now I second guess everything
Met with a broker over coffee near the 225 corridor last week. He said most listings quote cap rates based on 2023 income, not what rents actually do in 2025. He showed me two flex properties, same square footage, one listed at 6.2% cap and the other at 7.1%. After checking the actual lease escalations and vacancy history, the lower cap property nets more per door. He told me, "Cap rate is a starting point, not a verdict." That stuck with me because I nearly put an offer on a 1970s office building in Lakewood based purely on the advertised number. Has anyone else found that underwriters or sellers quote cap rates that ignore upcoming tenant rollovers or deferred maintenance? What do you ask for before trusting a listing's cap rate these days?
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sullivan.finley27d ago
Totally get it, had the same gut punch after digging into a listing myself.
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