What is the typical range (amount/percentage of the purchase price) that you’re seeing for the cap and basket in your PSAs for the sale of commercial real estate?

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I'm in house for a large institutional owner and developer that tracks this across our assets on both the buy and sell side, and most deals with an institutional counterparty fall in the 1 to 2.5% range assuming the asset is worth at least $50mm. Small deals have bigger percentages obviously and really large deals can go below 1%. While the cap is important, what gets excluded from the cap is in many cases just as or more important.

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Depends on purchase price. Very different for a $1M acquisition compared to a $325M one.

5% is pretty market

I’d agree 5% on the cap is reasonable.

I’ve been doing those for 25 years - it wasn’t all that long ago that 10% was not uncommon, although holdbacks didn’t always match the cap (some sellers relied on the thought that reputational risk as a transaction partner would provide at least some additional security).

When comm no person for deals amped up, caps came down, and the lower caps became the new normal.

We do 1% of PP as cap.

2-5% but agree that its highly dependent on PPrice.

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