Question: When may a terminal cap rate be lower than a going in cap rate? When may it be higher?

When may a "terminal" cap rate be lower than a "going in" cap rate? When may it be higher?

Step by Step Solution

★★★★★

3.27 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

A terminal cap rate may be lower than the going in cap rate if between the ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Real Estate Principles Questions!

Q:

Figure 5.11 demonstrates the efficiency implications of using cap- and- trade versus an emissions fee when costs are higher than expected and marginal social benefits are inelastic. Figure 5.12 does...

Q:

Discuss the differences between using (1) a terminal cap rate and (2) an appreciation rate in property value when estimating revision values.

Q:

Athena Investment Company is considering the purchase of an office property. After a careful review of the market and the leases that are in place, Athena believes that next years cash flow will be...

Q:

When may a terminal cap rate be lower than a going - in cap rate? When may it be higher?

Q:

please set up pro forma and amortization table!!! 4 Subject Property 5 This is a Class B duplex in Gainesville that you plan to renovate before leasing out to students in order to 6 command higher...

Q:

please help, thanks!! Xcel d. Based on your answer in (b), if the building could be reproduced for $2,300,000 today, what would be the underlying value of the land? 14. Spreadsheet Problem. Refer to...

Q:

Explain why some of the interest paid by Morguard is expensed on the income statement and some of the interest is capitalized on the balance sheet? What percentage of total interest incurred was...

Q:

1. The fee simple value could exceed the leased fee value because A. Market rents are higher than contract rents on existing leases B. A higher discount rate is used for the fee simple value estimate...

Q:

Refer to the Ch10_Mort Eq Cap tab in the Excel Workbook provided on the website. This replicates the example discussed earlier. a. Suppose that there is an aggressive lender that is willing to allow...

Q:

Which of the following assertions are true. Circle or highlight all correct answers. A. For a given property, the terminal cap rate is typically lower than the going-in cap rate B. For a given...

Q:

Access the glossary (Master Glossary) to answer the following. (a) What is a convertible security? (b) What is a stock dividend? (c) What is a stock split? (d) What are participation rights?

Q:

Complete and balance the equations for the following reactions. a. Li(s) + N2(g) b. Rb(s) + S(s) c. Cs(s) + H2O(l) d. Na(s) + Cl2(g)

Q:

Find an example of a study that uses statistics in a magazine, newspaper, or website. Determine what variables were measured, and, for each variable, determine its type. Which of the questions listed...

Q:

=+z Should activities be carried out within the organization or outsourced to others?

Q:

Why migla alender prefer a loan with a lower interest rate and participation AppendixLO1

Q:

How do you think participations affect the riskiness of a loan? AppendixLO1

Q:

What is the motivation for a sale-leaseback of the land? AppendixLO1

Q:

Question 1. Canada has had a Free Trade Agreement with the US and Mexico since 1994 so there are many years of quantifiable data to analyze its positive and negative effects. The new agreement, the...

Q:

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither...

Q:

4. Assuming a risk-free rate of 8 percent and a market return of 12 percent, would a wise investor acquire a security with a beta of 1.5 and a rate of return of 14 percent given the facts above? 5....