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Cap Rates

A property that the tenants think is worth 10% more in rents will generally sell for 10% more in the sales price.
And sometimes they are wrong. I knew one who booted the residents, did some cheap upgrades, and then took over a year to get all 8 units occupied again. He'd raised the rents, but there were about 40 units on this street and his was the most expensive rents. He only filled up with all the other units were full first.
 
And sometimes they are wrong. I knew one who booted the residents, did some cheap upgrades, and then took over a year to get all 8 units occupied again. He'd raised the rents, but there were about 40 units on this street and his was the most expensive rents. He only filled up with all the other units were full first.
Of course they can be wrong. That's why we always use more than one sale in our rent surveys and SCs - to see what the group is doing, not the individual.
 
AI Overview

While the word "risk" itself isn't inherently a racist code word, the
perception and application of the term can be influenced by racial stereotypes, according to a study by Northwestern University. This study found that people tend to associate responsible risk-taking with white stereotypes and reckless risk-taking with Black stereotypes.
This means that even when the word "risk" is used in a seemingly race-neutral context, implicit biases and societal understandings can lead to different interpretations based on racial assumptions. For example, a Black person's actions might be perceived as reckless risk-taking, while a white person's identical actions might be seen as responsible or courageous.
Additionally, the concept of risk and its relationship with race has a history rooted in discriminatory practices, such as the transatlantic slave trade where enslaved Africans were insured as a form of risk management. In modern contexts, discussions around risk in various fields, like healthcare or finance, can perpetuate racial disparities if not approached with careful consideration of the influence of systemic racism and implicit bias.
Therefore, while the word "risk" itself is not a code word for race, the racial undertones associated with perceptions of risk-takers can make its use in certain contexts susceptible to reinforcing harmful stereotypes and contributing to racial inequality.

...risk is just a code word :rof:
 
There's a Jack In The Box for sale in Bay Area with a 4% cap rate.
Seems low.
What would cap rate be for such a tenant in your area?
 
Certain property types sell to so-call NNN Investors. They're literally buying the investment grade lease and those often sell on a nationwide basis, not necessarily to local investors.

Fast food franchise units are one of those property types.
 
I just came back from SF.
Certain prime commercial streets have many vacancies and some better off.
One of my property is on busy street with half of stores vacant.
Another in different neighborhood seems to be getting more occupancy after 10 years of slow decline. Walgreen and other big stores left and more of nonpofits like charities and church have taking over. Ugh.
At least stores getting filled.
 
residential appraisers need to develop risk ratings and adjustments....that will get the unethical stakeholders undies in a wad :rof:
 
Interest rates have gone up over the last few years so capitalization rates will typically follow. Before, cap rates were held artificially low as investors thought there would be a chance in the near future to refinance. This optimism has dwindled. Low capitalization rates can be a product of a large equity position. I've seen a lot of negative leverage and there is still a lot of money chasing investments.
 
I just looked at cap rates in SF.
I'm surprised cap rates have gone up from 5 years ago.
Not good for my SF properties.
 
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