Does Cap Rate Really Affect the Risk of an Investment?


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When considering a potential asset investment, there are a number of different means by which to separate the wheat from the chaff, says Kurz.

LOS ANGELES—Anyone investing in commercial real estate has a sense of what cap rate means. Sellers want to sell at the lowest cap rate possible. Buyers want the highest cap rate they can get without sacrificing security. But how does Cap rate really affect the risk of an investment? The exclusive column below by Chad Kurz, a managing partner at Matthews Retail Group Inc., answers just that.

The views below are the author’s own.

In order to simplify decision-making for investors, I’ll break it down to a tried-and-true methodology in its simplest terms…


Does Cap Rate Really Affect the Risk of an Investment?

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