The discount rate used to determine the present value of a stream of future...

Same as capitalization rate.

One of the most popular valuation formulas for commercial real estate, where net operating income (NOI) divided by the sales price equals the cap rate (capitalization rate). Usually, the higher the cap rate the higher the property risk (i.e. leases coming due, location, tenant credit).

(Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price.

a percentage by which NOI is divided to arrive at a single amount representing present value

Please also see this page for more information. CAP RATE explained in detail: http://www.turnkeyproperties.netreal.net/resources_details.php?id_art=48892&img_id=0 According to the Appraisal Institute, a cap rate is the method used to convert an estimate of a single year's income expectancy into an indication of value, by dividing the income estimate by an appropriate rate. Expressed as a formula, it looks like this: Cap Rate = NOI / Value Where NOI = Net Operating Income. This also leads to the derivative formulae: Value = NOI / Cap Rate, and NOI = Value x Cap Rate

The discount rate used to determine the present value of an income producing property based on its future earnings.

The capitalization rate expressed in a percentage.

The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

A net yield set by an investor to determine the value of an income producing property.

apitalization rate, which is the percentage selected for use in the income approach to valuation of improved property. It is a financial measure that indicates whether a real estate investment will yield an acceptable return. It is determined by dividing the projected income stream of the upcoming year by investment dollars.

The highest rate that a borrower will pay within a defined time period. Examples are; the rate committed on a commitment letter or a mortgage pre-qualification (also known as a "rate hold"); or the maximum rate that will be paid by the borrower during the term of a "protected variable rate mortgage". A lender will usually have to incur a cost to insure against rate increases during the capping period. This insurance is called a "hedge".

Abbreviated form of “capitalization rate,” the rate of return used in income properties. It is a comparison between net operating income and sales prices of properties, used by appraisers to estimate value based on similar income property sales in the same area.

Rate of return on sales price: N.O.I. divided by sales price.

Short form for capitalization rate.

A rate of return used to derive the capital value of an income stream. Value = Annual Income / Cap Rate.

A contraction of capitalization rate, a cap rate expresses the income a real estate investment generates as a percentage of the property's price or value.