Property Valuation
A Connecticut commercial property sold for $2,100,000. The annual NOI is $147,000. What is the overall capitalization rate implied by this sale?
A6.5%
B7.0%✓ Correct
C7.5%
D8.0%
Explanation
Cap rate = NOI ÷ Value = $147,000 ÷ $2,100,000 = 0.07 = 7.0%. Using the values given ($2,100,000, $147,000), apply the appropriate formula.. The correct answer is 7.0%.. This is a common calculation on the Connecticut real estate exam.
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