Property Management
The capitalization rate for a Missouri commercial property rises. This generally means property values:
AIncrease
BDecrease✓ Correct
CStay the same
DAre unaffected by cap rates
Explanation
Value = NOI ÷ Cap rate. If the cap rate rises (denominator increases) and NOI stays constant, property value decreases. Rising cap rates signal increasing risk or rising interest rates.
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