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Cap rate spread is the difference between the cap rate of commercial properties and current interest rates, typically measured by the 10-year Treasury Rate. Cap rate spread is an important indicator of risk, as U.S. Treasury bonds are considered virtually “risk-free,” while real estate investing involves a considerable degree of perceived risk.
Gross Rent Multiplier (GRM) is one of the most popular and effective metrics used to determine the return on investment (ROI of a commercial or multifamily property. It’s particularly effective at comparing a property’s profitability compared to similar assets in the same market or submarket.
Cap rate is one of the most popular ways to calculate a commercial or multifamily property’s return on investment (ROI). Cap rate, also known as capitalization rate, is calculated by dividing the net operating income of a property by its market value.
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