Class A Multifamily Cap Rates Comparison

Nashville prices the best going-in yield of the three — Austin's cap rate is tightest despite the worst fundamentals

Austin's Class A multifamily cap rate sits at 4.90% today — the tightest (most expensive) pricing of the three markets — even though Austin is the one still working through a genuine rent correction, not a stale print . Nashville trades at 5.18%, the widest of the group and roughly 20 bps above its own trailing-decade average, while Raleigh sits at 5.07%, almost exactly on its ten-year norm .

Current Cap Rate	Position in 21-Yr Band	Position in Trailing 10-Yr Band	Cap Rate vs. Own 10-Yr Avg	Asking Rent, 12-Mo Chg	Occupancy	Occupancy, 12-Mo Chg
5.18%2	34% / mid1	77% / rich1	+20 bps	+3.0%	92.0%	-3.6 pp
5.07%2	29% / tight pricing1	65% / mid1	+3 bps	-1.5%	92.8%	-2.1 pp
4.90%2	31% / tight pricing1	68% / rich1	+5 bps	-3.5%	92.4%	-2.0 pp

Why Austin is the one to be careful with. Its cap rate is the lowest of the three — tightest pricing, most dollars paid per dollar of NOI — yet its rents are down 3.5% over the trailing 12 months and occupancy has slipped to 92.4% , the legacy of the supply wave that hit Austin harder than almost any other Sun Belt market. Pricing hasn't caught up to fundamentals there; a buyer today is paying a premium multiple for a market still absorbing new units.

Nashville is the opposite story. It has the highest cap rate of the group (best going-in yield) and rents are still growing (+3.0% T12) — the combination of cheaper pricing and healthier top-line that "relative value" is supposed to mean. The one soft spot: occupancy fell 3.6 points over the year, the steepest of the three, so some of that rent growth is being bought with lease-up pressure rather than pure pricing power — worth underwriting carefully rather than extrapolating flat.

Raleigh is the balanced, unremarkable middle. Cap rate sits almost exactly at its own decade average, rents are down modestly (-1.5%), and it holds the best occupancy of the three (92.8%) — the safest read of the group, but not the one offering incremental yield.

One caveat that applies to all three: cap rates are still 70-80 bps below their full 21-year structural mean (5.6%-6.0% across these markets, spanning the GFC, ZIRP, and hiking-cycle regimes) , so none of the three is "cheap" against full-cycle history — they're cheap only relative to the ultra-compressed 2021 lows. And the rate backdrop is a wash across all three: fed funds sits at 3.63% today against a 2028 median FOMC projection of 3.4% — modest easing, but under the engine's 25 bp threshold for a directional call, so it reads "stable" and doesn't differentiate the three markets.

Bottom line: if forced to rank on relative value, Nashville > Raleigh > Austin — best yield, best rent trajectory, versus Austin carrying the most pricing risk relative to where its fundamentals actually are. What would change this: if Austin's absorption turns and rent growth reaccelerates before the next print, its tight cap rate would suddenly look justified rather than premature.