Long Term Good Buying Opportunity, page-8

Most of the valuations quoted on are based on capitalization rate. As below:

Cap Rate Definition

What is a cap rate? The capitalization rate, often just called the cap rate, is the ratio of Net Operating Income (NOI) to property asset value. So, for example, if a property recently sold for $1,000,000 and had an NOI of $100,000, then the cap rate would be $100,000/$1,000,000, or 10%.

Cap Rate Example

Let’s take an example of how a cap rate is commonly used. Suppose we are researching the recent sale of aClass A office building with a stabilized Net Operating Income (NOI) of $1,000,000, and a sale price of $17,000,000. In the commercial real estate industry, it is common to say that this property sold at a 5.8% cap rate.

I suspect replacement cost is closer to $2.90, pre-Covid-19 NTA.