Fall/Winter 1992, Vol 17, No 2

Abstract: Changes in the value of real estate are due more to changes in rental rates, vacancy rates and expense items than to changes in capitalization and discount rates. At the same time, it is interesting to note that as 25 Baa-rated securities have declined by over 100 basis points, discount rates have increased by 25 to 75 basis points. Thus, risk in real estate is being measured in the marketplace by changes in yield expectations. This article presents the results of a recently published study of value indicators.