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Will current Cap Rate levels impact REITs and how? Will the impacts be visible in the short term or long term on financial reports?- Rocco64 - 2019-04-20 12:06:36 PDT

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Some cities are at the peak of the real estate market cycle, meaning the demand for units is higher than supply. So REITs are paying more for assets in these areas right now. - Kev B - 2019-05-03 14:24:16 PDT

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Yes, with low cap rates, REITs are paying a premium for these properties, and if there is a downturn in the market which forces them to reduce prices or occupancy levels go down, the ROA will be lower. - Sem_Sem - 2019-06-11 20:47:56 PDT

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Cap rates have been at pretty much historic lows in last years, this reduces the returns for the individual investor of real estate and for REITs. A year ago I was looking at physical properties to invest to get some direct investment into real estate, and the Cap rates offered in major markets was at the range below 5%. That made the returns very unattractive for me, even more, when weighing the risk. So for REITs it is a similar process, the lower the Cap rate, the smaller the margins compared to the properties acquisition cost and the debt financing. So this affects the overall bottom line of a REITs AFFO/FFO. - Gekko5 - 2019-04-20 18:46:05 PDT

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