Capital Markets Linkage
The relationship between real estate cap rates and the broader capital markets (Treasury yields, credit spreads, equity returns). Cap rates feel like real-estate-specific numbers but are tightly tied to the rate environment through the cap rate decomposition framework. The capital-markets linkage explains why cap rates moved in lockstep with rates during the 2010-2021 compression and 2022-2023 expansion cycles, and why real estate cannot be understood in isolation from the broader rate environment.
Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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