IRR: Residential and Commercial Projects
To determine the typical rates of return generated by various classes of housing projects in the US.
- The average rate of return or cap rate for multi-family housing properties in the US was 5.11 percent for infill housing and 5.37 percent for suburban housing in the second quarter of 2019.
- Affordable housing properties typically generate an annual return of 6.6 percent for-profit investors who invest in this sort of housing, according to a report by the NREI.
- The cap rates for retail spaces were 7.47 percent for neighborhoods, 8.54 percent for power, and 4.78 percent for high streets in the second half of 2019, according to a recent report by CBRE.
- In 2019, hotels located in central business districts (CBD) generated, on average, 7.99 percent return on investment, while those located in the suburbs generated 8.55 percent.
- The cap rate for industrial buildings was 6.13 percent in the second quarter of 2019.
- Office spaces located in central business districts (CBD) generated, on average, 6.65 percent return on investment, while those located in the suburbs generated 7.88 percent.
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