This paper is an empirical study of the capitalization rates for 41 residential properties in Manfredonia from 2012 to 2014. While literature is normally focused on the cap rate determination (Macdonald et al., 2008) and his linkage with time series and with models such as band of investment analysis and their relationship with the equity determination in this work a spatial approach to cap rate and risk premium determination is proposed. It will be shown how it is possible to use cap rate as a tool for real estate market analysis. Evidence from the application of spatial technique to cap rate and risk premium determination demonstrates the importance of this technique in the real estate market analysis.
Capitalization rates, Residential Properties, Property Valuation
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Cite this paper
Maurizio d’Amato, Malgorzata Renigier Bilozor, Andrzej Bilozor. (2016) Spatial Approach to Capitalization Rate Determination in Residential Market Segment a Case in Manfredonia. International Journal of Economics and Management Systems, 1, 259-269