---
title: The Cap Rate Conundrum
description: Despite weaker fundamentals in the CRE industry, cap rates are expected to compress. Join Keyser's Capital Markets Specialist for a 2020 Q3 market update.
image: https://blog.keyser.com/hubfs/shutterstock_1188428608%20%5BConverted%5D-01-1.png
---

[Insider](https://blog.keyser.com/topic/insider) , [Videos](https://blog.keyser.com/topic/videos) , [Commercial Real Estate](https://blog.keyser.com/topic/commercial-real-estate) , [Capital Markets](https://blog.keyser.com/topic/capital-markets)

# The Cap Rate Conundrum

[By Brian Uretzky](https://blog.keyser.com/author/brian-uretzky)

 July 02, 2020

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## ![shutterstock_1188428608 [Converted]-01-1](https://blog.keyser.com/hs-fs/hubfs/shutterstock_1188428608%20%5BConverted%5D-01-1.png?width=1043&name=shutterstock_1188428608%20%5BConverted%5D-01-1.png)Even in the volatile market we've been experiencing in 2020, investors are still looking to do what they do best—invest their money.

With everything so uncertain, finding the right place to invest your money becomes quite challenging. Typically, commercial real estate is a safer bet for a steady ROI compared to other investing options.

# Based on what we're seeing today, even with weaker fundamentals, we're likely to still see a great deal of investments in the commercial real estate industry.

Whether you're an investor or a tenant, if you are in the position to purchase a building, it is important to consider a few factors and understand some of the industry lingo.

Before we jump into the industry trends, the cap rate conundrum, what a future state of the market could look like, and a real-world example, here’s a quick primer to help give meaning to the information covered in this week's market update:

### **Cap Rates: **(NOI) ÷ Purchase Price

### **NOI:** Net Operating Income

### **Yields:** Yields are the amount of profit an investment will gain.

If you have any questions about your commercial real estate situation, or need advice on your lease agreement, let us know. We’re here to serve.

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[All posts](https://blog.keyser.com)

[Brian Uretzky](https://blog.keyser.com/author/brian-uretzky)

Brian has 20 years of experience in finance and commercial real estate. Prior to joining Keyser as the new head of Keyser’s Capital Markets Practice, Brian worked at a 250 billion dollar investment manager in Boston. He was the senior trader for Commercial Mortgaged Backed Securities (CMBS), helping to manage a five billion dollar portfolio of CMBS across hundreds of client accounts.

[** ](https://keyserco.com/our-team/brian-uretzky/)

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