Self-storage assets lack the architectural themes and fine details that produce trophy properties in the office and retail sectors. No gleaming lobbies or guest amenities like the hotel sector. Yet investors have recognized other virtues in the self-storage asset class and driven capitalization rates (the annual return on the purchase price) down by 2.75 percent in recent years, a pace of almost .05 percent per quarter, according to a recent asse
The "Cap Rate" also known as "Capitalization rate" expresses the return on a real estate investment as percentage (%). It indicates investors how much % of their investment the property is returning (usually in a year). Debt payments are NOT considered in this calculation. Cap Rate = (Net Operating Income (NOI) / Price) x 100% To calculate the Cap Rate you need to first calculate your NOI (income from property less expenses) Visit our blog to find out more!