|
Ol’ Wisco | I believe this is a question that has many scratching their head. One would venture to believe a +5% cap rate is needed considering the RFR is near to that. But portfolios holding land are looking at long term avg returns, an inflation hedge, a hard asset vs paper or some or all of the above.
Big problem is that all these measures presume a ZIRP (or near) regime being ushered back in a relatively near time frame.
IMO anyone using a cap rate sub the RFR for assumed holding period is not truly looking at value vs value. It is definitely an interesting time in the land market that’s for sure
| |
|