7 tips to adjust a hotel’s benchmark cap rate

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2016-02-15
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A hotel’s cash-flow generation potential determines its fair market value. According to the income capitalization method, a hotel’s projected cash-flow from the following year is divided by cap rate to determine its current value. Therefore, keeping other things constant, there is an inverse relationship between cap rate and asset value. And this article presents some tips on hoe to adjust benchmark cap rate.

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