Investor's Corner - What is capitalization (cap) rate in a commercial property?

Thursday Jan 6th, 2022

Muti Family Commercial Apartment

For an investor, or anyone that is considering purchasing commercial real estate, the most common question that needs to be answered is this; WHAT IS THE CAP RATE? What does that even mean? Simply put, capitalization is the process of converting the income of a given property into a capital value. A capitalization (cap) rate has more than one rate embodied in it (i.e. the discount rate and the recapture rate). There are two different types of capitalization in the CRE market; direct... [read more]


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