Cap Rate Consultation
Capitalization rates (also known as cap rates) reflect the relationship between income and value are derived from market data. It is essential that the properties used as comparables reflect risk, income, expense, and physical and location characteristics that are similar to the property being appraised. Consequently, cap rates must be extracted from properties that reflect similar income-expense ratios, risk characteristics, and expectation as to change in income and value over a typical investment-holding period. It is extremely critical that a true cap rate is derived as a mere 10 to 50 change in basis points can result in a significant difference in value. We specialize in this analysis. Please contact us for any commercial appraisal and valuation services such as performing cap rate consultation services.