Property Valuation
In Missouri, a 'cap rate compression' (declining cap rates) typically indicates:
AFalling property values
BRising property values relative to income, often reflecting increased investor demand✓ Correct
CRising vacancy rates
DIncreasing operating expenses
Explanation
Cap rate compression means cap rates are declining, which (with stable NOI) implies rising property values. It typically reflects strong investor demand, low interest rates, or expectations of income growth.
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