With a shifting velocity and cap rate, Sarasota’s Commercial Real Estate market is in motion. The average market cap rate is currently 8.7% vs. 7.3% at the end of the 3rd quarter.

What is a Cap Rate?

Capitalization rate, sometimes known as cap rate, is a metric for assessing a property’s investment potential. It’s the ratio of the property’s net operating income (income from the property minus operating expenses) to its purchase price. A lower cap rate signifies a lesser return but perhaps a more creditworthy investment, whereas a higher cap rate offers a potentially higher return on investment with potentially more risk. The purchase price and cap rate are inversely related; as the cap rate rises, the price falls.. #MarketDynamics #caprate