From the RealEstateJournal Archives
Capitalization Rates
For Offices Sink to Low
by The Wall Street Journal Online
October 25, 2007
Capitalization rates generally have marched downward since 2001, but they hiccupped for apartments while dropping to a low for office properties.
The capitalization rate is a calculation of rental income in the first year of ownership, divided by the purchase price.
After increasing in July to 6.26%, cap rates for apartments dropped again and ended September at 6.09%.
For central-business-district office properties, cap rates hit a low in September of 5.54%.
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