Implied Cap Rate

Implied cap rate is a capitalization rate inferred from a REIT’s market valuation and estimated property net operating income.

Why this matters to income investors

The market’s property valuation can be compared with transaction yields, subject to debt and assumptions.

How to use implied cap rate in your research

Check the company’s assumptions and the period used for the comparison. Compare the expected property income with financing and operating costs before treating a transaction or valuation change as dividend support.

This material is general education and information, not individualized investment, tax, or legal advice.