BUY Commercial R.E. NOW as RATES go up and VALUES Fall ?

Hi All:
The main questions seems to have been overlooked.
Please consider this post Closed.
Thanks

Hello PA,

I do not have commercial experience but this just seems like a straight forward money question.

IMO I think your cap rate would be higher than 7% in 10 years, due to the fact that you have regular rent increases each 1, 3, or 3 year cycle.

So you could start with a cap rate of 7%, however assuming you have a locked in fixed rate, and NOI hasn’t increased drastically at the end of 10 years you should have a cap rate at least 1% or 2% higher than when you started 10 years go.

So a 9% cap rate should be much better than what you can get on a CD account with the bank. But of course you give up you’re FDIC insurance and AAA government backing.