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Comparison Between Direct Capitalization and Discounted Cash Flow Methods

 The direct capitalization method, or the stabilized net operating income (NOI) method, is defined by the market capitalization rate. Unlike the DCF method, the NOI for each year during the holding period, plus the salvage value at the end…

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Computing Property Values Using Direct Capitalization and Discounted Cash Flow Methods

 Direct Capitalization Method Remember that the direct capitalization method takes a single years’ NOI and the property value into account. When we consider the aspect of property growth at a constant rate in terms of income and value, then:…

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Direct Capitalization and Discounted Cash Flow Valuation Methods

 Net Operating Income Net operating income (NOI) is calculated when using the income approach to evaluate properties. It’s the quantity of revenue collected from a commercial property, i.e., the net of operating expenses before interest and taxes. However, NOI…

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Valuation of Real Estate Properties

Valuation of Real Estate Properties Valuation of any commercial property is intrinsically valuable as it determines the worth of any particular real estate property. Income Valuation Approach In this scenario, a comparison is created where an investors’ acquisition price is…

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Types of Commercial Properties and Their Characteristics

 Commercial Real Estate Properties can be classified as follows: Office. Industrial and warehouse. Retail and multifamily occupancy units. Hospitality, i.e., hotels and restaurants. Land. The above types of commercial property are mainly used is to create a low-risk portfolio,…

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Alternative Investments

Reading 35: Real Estate Investments -a. Compare the characteristics, classifications, principal risks, and basic forms of public and private real estate investments; -b. Explain  portfolio roles and economic value determinants of real estate investments; -c. Describe commercial property types, including…

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