California takes the top 4 spots in lowest Cap Rates (all <5%) for multi-family housing per the H1 2015 CBRE North America Cap Rate Survey. Nationwide, Tier I, II, III markets are averaging just above 5%. As investors chase returns cap rates are driven lower, helped by near-zero interest rates. Below is a table of Class A Cap Rates in US metros:
Roughly 1/3 of the $110 billion invested in U.S. commercial real estate in Q2 2015 has been multifamily acquisitions.
However, value-added opportunities remain abundant as we are seeing investors paying premiums for stabilized multifamily properties. In other words, acquiring/renovating/stabilizing/re-positioning multi-family properties continues to be a lucrative business model in today's market.