Thank you for your question. This highly depends on how you capitalize the acquisition (e.g. debt/equity or LTV ratio) and also on the specific location and quality of the property. For example, has the property been substantially renovated or is their lots of "value-add" investment opportunity, which increases the risk but also the expected return? Is the location "core" in important areas of the city or located in less competitive districts within the Tier 1 markets. The first place to look is at research provided by the brokerage firms (CBRE, JLL, HFF) for free on their website. You might have to enter your contact info to gain access. These research reports will tell you the average cap rates seen recently across various Tier 1 cities and submarkets. You can use this cap rate info along with your expected financing strategy to begin to arrive at a reasonable return expectation for each market. You can reach me via my profile; I am also happy to send you some research to help with your question.
What IRR is reasonable to expect in Tier 1 markets for multi-family?
We are seeking to invest $10-$25 million in multi-family in the United States. What kind of IRR should we expect from a partner in Tier 1 markets?