Vallabh, the pt you’re highlighting is captured in the IRR i.e., 5.75%., had there been no growth of the property this IRR would have been different than what it is.
Formula under Direct Cap Method is, NOI1/Cap Rate, where Cap Rate = Re – g & this g refers to the growth rate of NOI.
I hope the above explanation serves your purpose. Thank you!
Vallabh, the pt you’re highlighting is captured in the IRR i.e., 5.75%., had there been no growth of the property this IRR would have been different than what it is.
Formula under Direct Cap Method is, NOI1/Cap Rate, where Cap Rate = Re – g & this g refers to the growth rate of NOI.
I hope the above explanation serves your purpose. Thank you!