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As real estate investors contend with high-interest debt and soaring prices, some are turning their attention to often-overlooked metro areas in search of higher returns. Nick Gerli, CEO of Reventure Consulting, has identified five markets where investors can potentially find the most attractive capitalization rates («cap rates») in the current environment.
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“These are markets where investors can still cash flow in 2024, even with today’s interest rates,” Gerli wrote on X (formerly Twitter).
According to Gerli, Jackson, Mississippi, tops the list with an 8.5% cap rate. New Orleans follows at 7.8%, while Columbia, South Carolina (7.1%), Pittsburgh (7.0%), and El Paso, Texas (6.9%) round out the top five.
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Cap rates, a key metric in commercial real estate, represent the ratio of a property’s net operating income to its market value.
