What cap rates should I underwrite for Orlando multifamily in 2026?
Cap rates vary by asset type, vintage, location, and lease-up status across a 300-basis-point range. Core stabilized Class A (2018+ vintage) in Lake Nona, Horizon West, and downtown trade at 4.8–5.2% cap rates to institutional and pension buyers. Class A core-plus (2015–2018 vintage) trades at 5.0–5.5%, eligible for Fannie/Freddie agency financing with green loan premiums. Class A lease-up from merchant builders trades at 5.5–6.0% going-in cap on trailing NOI. Class B value-add with below-market rents underwrites at 6.0–7.0% going-in, targeting 5.0–5.5% exit caps. The critical underwriting variable is the exit cap rate assumption. In 2026, assume exit caps within 25–50 bps of entry caps; value creation must come from NOI growth, not cap rate compression.