Factors Influencing Capitalization Rates

Brent Ambrose and Hugh O. Nourse
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Hugh O. Nourse: Department of Insurance, Legal Studies and Real Estate Terry College of Business The University of Georgia Athens, Georgia 30602, http://www.terry.uga.edu/realestate/

Journal of Real Estate Research, 1993, vol. 8, issue 2, 221-238

Abstract: This study examines the variations in quarterly mean "capitalization rates" for commercial and industrial investment properties. By explaining the variations in the capitalization rate, we hope to expand the research in explaining variations in the overall return to property. This study differs from other research on portfolio capitalization rates because we separately analyze these rates by property type. The results show that using "averaged" capitalization rates across property types eliminates important information. We use the band of investment approach to develop a theoretical model explaining the capitalization rate and test this model using both Seemingly Unrelated Regression (SUR) and cross-sectional/time-series regression (panel data).

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (22)

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