The Best Ever CRE Show JF: 3986: Sales Trends, Cap Rate Nuance, and Why 2025 May Be the Time to Buy with John Chang
Aug 3, 2025
John Chang, a seasoned real estate investor and head of research at Marcus and Millichap, shares insights on the latest in commercial real estate. He emphasizes the importance of transaction velocity over dollar volume, demystifying current sales trends, particularly in multifamily and retail markets. Chang discusses nuanced cap rate trends, revealing how quality shifts influence market perception. He predicts 2025 could present a prime buying opportunity, thanks to stable interest rates and favorable tax conditions, making it an enticing time for investors.
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Transaction Velocity Over Dollar Volume
- Transaction velocity is a more reliable market indicator than dollar volume due to large portfolio deals skewing totals.
- Deal count rose 12% in Q2 and 15% in the first half of 2025 despite dollar volume fluctuations.
Value of Hedonic Cap Rates
- Hedonic cap rates normalize for property size, type, and location to reduce distortions from deal quality shifts.
- Apartment hedonic cap rates have been steady at 5.7% for six consecutive quarters, indicating stability.
Multifamily Deal Size Dynamics
- Private investors dominate smaller multifamily deals under $10 million, driven by personal motives over pure returns.
- The 10-20 million segment shows strong growth, favored by syndicators and private buyers but less by institutions.