Surprisingly little correlation between interest rates and cap cates
Barry Stuart
![Barry Stuart]()
Barry Stuart
At ICR, we exist to secure exceedingly smart real estate solutions and propel our clients towards prosperity.
Any discussion on cap rates needs to be prefaced with a cautionary note.
That is, there are many factors that determine capitalization rates on a commercial real estate investment.
Those factors include but aren’t limited to age and condition of improvements, covenant of tenants, term of leases, location, asset class and the tenant mix.
Vice President - Business Development at Suncorp Valuations
3 年Very good article Barry, so many factors in developing a substantiated cap rate. Interest rates are only one factor. Overall, we like to describe cap rates as a risk rate, the lower the risk due ue to quality of the property, tenant mix, location, and interest rates the higher the market value which will mean a lower cap rate.