Looking at quite a few refinance requests (senior perm) for decently leased “Class A” office in secondary/tertiary markets (think the best office building in markets like Hartford, Cincinnati, Kansas City) where all the top professional firms tend to want to be.
rent roll is solid, no major roll in any given year, so I feel like the cash flow for the next 3-5 is somewhat predictable. Good credit in general. But how an appraisal will look is beyond me. I’d imagine cap rates on these locations even in Class A will be well north of 10%, no?
Can’t speak to those specifically, but Indianapolis (which is very comparable to KC) is around 13-14% for class B/class C. So, for a class A office that’s fully leased, I think 10-11 could make sense. But I could be way off
The appraisal for these "Class A" office buildings in secondary/tertiary markets can be difficult to predict. While the rent roll and cash flow may be stable for the next few years, the appraisal will also consider factors such as the location and market conditions. It is possible that cap rates for these locations may be higher than 10% due to the perceived risk and lower demand compared to prime markets. However, it ultimately depends on the specific market and the individual property's characteristics.
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