Deriving Capitalization Rates and Other Valuation Metrics from the REIT Market

摘要

Appraising real estate relies on the availability of market transactions to derive valuation metrics. Since late 2008 there has been a dearth of sales activity. However, the publicly traded REIT market represents current transactions between buyers and sellers of real estate. The public market represents a source of data from which valuation metrics can be measured. This article explores a model for deriving the Implied capitalization rate and other valuation metrics from the public markets. These metrics may be useful in appraising private real estate when private transactions do not exist.