Meanwhile, investment properties in Suffolk County on the east end of Long Island had an average cap rate
of 5.3 percent, with median prices of $340,000.
A new report from Vacasa, North America's largest vacation rental company, has ranked vacation rental markets based on aggregate cap rate
. Capitalization rate (referred to as cap rate
by most) is the ratio of a property's net operating income over its cost.
"The tighter cap rate
spreads suggest that investors have more confidence in the commercial real estate market," said Muoio.
(OAR), initial rate of return in an all-cash transaction.
"In those markets where change is anticipated, cap rates
are more likely to increase rather than decrease--but any changes will be small," CBRE's North America Cap Rate
The company's 21 separate acquisitions aggregated approximately 8.8m square feet, with an average cash cap rate
of 7.2%, an average annualized straight-lined cap rate
of 7.9%, and an average lease term in excess of 11 years.
A second example would be Direct Capitalization (cap rate
Mathematically, the "cap rate
" equation is simple: Property Value = Annual Net Operating Income / Cap Rate
* McDonald's state wide average is a 4.24% cap rate
The Class A office building sold at a cap rate
, the annual rental income from a building divided by its purchase price, of 9.6 percent.
In appraisal textbooks, the relationship between discount rates and overall capitalization rates, or cap rates
, is a simple one: Discount rate = cap rate
+ income growth rate or