Valuation Methods in Commercial Real Estate, Part 2 Written by Darren McCorkle Last month we talked a bit about capitalization rates (aka cap rates), a valuation method commonly used in commercial real estate. It is certainly a valuable tool, but it is far from perfect. Luckily we are not completely out of options. Internal Rate…
Valuation Methods in Commercial Real Estate: One of the most common yardsticks used in commercial real estate investments is the “cap rate”, which is a shortening of “capitalization rate”. Simply put a cap rate is the basic yield that a property provides to an investor in relation to the value or purchase price of the…
CAN LEVERAGE ACTUALLY BE THE MORE CONSERVATIVE APPROACH TO REAL ESTATE INVESTING? I would suggest that maybe a realistic level of debt may actually be a more conservative approach in real estate valuations today. I’m not suggesting that one loads up with 80% financing or a paltry debt service coverage of 110% or so, but what I would…