These measures included
direct capitalization and the capitalization of several liabilities COFIDE had for about USD102 million.
The City's assessor testified that for the 2012 valuation she had applied a
direct capitalization of income approach using mass appraisal techniques.
A second example would be
Direct Capitalization (cap rate).
New York also requires properties be valued on a fee simple basis, that is, free and clear of leases or other encumbrances, and via the
direct capitalization income approach--assuming the value reflected by a single year's income expectancy.
The
direct capitalization of income can be calculated as a ratio between the representative level of income and a capitalization rate, or the representative level of income multiplied by an income multiple (capitalization factor).
In this case, the analyst would conclude a 10%
direct capitalization rate (i.e., 14% discount rate -- 4% growth rate = 10% capitalization rate).
Remember, this
direct capitalization method for real estate is a shorthand method for a discounted cash-flow analysis.
A
direct capitalization rate can be derived from confirmed local or nearby sales and local income and expense data.
Two income methods are often used to value these properties:
direct capitalization and yield capitalization.
Two methods are commonly used: the
direct capitalization method and the yield capitalization method.
Fitch calculates UA using a
direct capitalization approach of annualized first-quarter 2018 unencumbered NOI using a stressed 7.5% capitalization rate.