Capitalization Rate (CAP)

/Capitalization Rate (CAP)

How Variables Affect CAP Rates in Alaska Commercial Real Estate

Higher is not always better. In a previous article, we reviewed the CAP rate as an initial indicator of value in Alaska commercial real estate. Now, let’s break down a couple common pro forma line items and explore how these variables affect CAP rates and the risk profile. Reserves vs. No Reserves Capital reserves are [...]

By | October 19th, 2016|Capitalization Rate (CAP), Investment Analysis|0 Comments

Understanding the CAP Rate Algorithm of Alaska Commercial Real Estate

Both commercial real estate investors and professionals alike in Alaska will take a close look at an investment opportunity before they make their final decision, examining various value factors. One in particular is the CAP rate or capitalization rate. You have may have heard of it before, but what is it? CAP rate = NOI [...]