overall capitalization rate


Also found in: Acronyms.

overall capitalization rate

(1) Sometimes referred to as the “going-in capitalization rate.” It is the first year's net operating income divided by the acquisition cost of the property. (2) In appraisal,it is the proper discount rate to account for the timing and amounts of all future cash flows from an income-producing property.

References in periodicals archive ?
It only requires specification of two items: the one year's income and the overall capitalization rate.
Overall capitalization rates and discount rates will remain where they are today.
However the real differential between discount rate and overall capitalization rate in investor surveys seems to be in the 1% to 2% range rather than the approximately 3% range that theory would indicate.
In the absence of sufficient data from second-generation deals, an option would be to estimate market rent using a percentage rent model and to develop an overall capitalization rate by an alternative method, such as a carefully vetted survey.
The biggest increases in overall capitalization rates are forecast to occur in the national regional mall market, as well as the Houston and Northern Virginia office markets, according to estimates.
For RL [right arrow] [infinity] the ground value term approaches zero, while the annuity factor becomes the reciprocal of the overall capitalization rate respective to perpetuity.
This is identical to the traditional, direct capitalization process in appraisal practice, where value is equal to net operating income (NOI) divided by the overall capitalization rate (V = NOI/[R.
The overall capitalization rate for real estate is not cointegrated with capital market yields, indicating that real estate is not a good substitute for stocks and bonds.
An appropriate indication of the overall capitalization rate for hotel investments
This article explores the relationship between the overall capitalization rate ([R.
The implied overall capitalization rate is 9%, assuming the project is leased and operated at market rates.