Property Valuation
In Kansas commercial real estate, 'cap rate compression' refers to:
AAn increase in cap rates over time
BA decrease in cap rates, indicating higher property values relative to income in a competitive investment market✓ Correct
CCompression of rental income due to market forces
DA reduction in depreciation rates
Explanation
Cap rate compression means cap rates are declining — investors are willing to accept a lower return (higher price relative to income) due to high demand for investment properties.
Related Kansas Property Valuation Questions
- When using the sales comparison approach, a Kansas appraiser adjusts the value of comparable sales by:
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