August 1996, Vol 21, No 2

Abstract: When direct capitalization is used to value regional shopping centers and their separately owned components (anchor department stores [anchors] and mall stores [malls]), little published research is available to help identify the appropriate levels of capitalization rates for anchors as compared with malls. Anecdotal information suggests that most practitioners use either the same capitalization rate for both anchors and malls or a slightly lower rate for anchor space. Less investment risk allegedly is associated with occupancy by department stores. The authors address this issue in their article.