This video, produced by Adam Gower of Gower Crowd, explores the all-important concept of the capitalization rate (cap rate) in real estate.
The cap rate drives the value of a commercial building. Cap rates are calculated based on the net income which the building is expected to generate and are used to estimate an investor’s potential return on their investment. As cap rates go down in a market, building values go up.
Adam uses a Small Change offering – 3451 Benning – to illustrate this concept. Find out more about the nuances of this metric, see how the issuer refers to it in his offering, and learn about recent cap rate trends.
Just press play!