Abstract

An Analysis of Office Building Cap Rates in Tokyo
Track: Business and Commercial
Authors: Kazuya Tani

A cap rate is used to convert income into value in commercial real estate appraisal. It measures the profitability of real estate and varies depending on building features, location, and lease contracts among others. In this study, we analyzed sales transaction data in Tokyo office investment market, and attempted to extract the influence of location on cap rates by using a GIS technique. Once sales transaction data are plotted on GIS, it allows us to analyze and visualize the influence of location effectively. We expect that this analysis will help appraisers to better estimate the cap rates of office buildings.

Key Words: Cap Rate, Real Estate Appraisal, Tokyo Office Investment Market