Thursday, February 20, 2014

Peter F. Korpacz, MAI speaks to Miami ASA on cap rates

On Thursday, February 20, 2014, Mr. Peter F. Korpacz MAI, CRE & FRICS spoke before the local Miami Chapter of the ASA (American Society of Appraisers) in Coral Gables. Philip G. Spool, ASA, introduced the speaker. 

Mr. Korpacz is the founder and original publisher of the quarterly Korpacz Real Estate Investor Survey®, one of the industry’s standard sources of real estate capital market trends, including capitalization and discount rates and other cash flow forecast assumptions of active real estate investors.

His company is Korpacz Realty Advisors of Mount Airy, Maryland.

Guests included Pedro Gomez, the former Miami-Dade County Property Appraiser.  Many local appraisers, Realtors, "tax agents", and tax magistrates attended the sold out dinner meeting. 

Korpacz spoke about the “elusive cap rate” and factors that go into this index.  He defined a cap rate as “any rate that converts income into value” and covered the following topics: cap rate vs. the discount rate, contract rent vs. market rent and the effect on cap rates, sources of obtaining cap rates, updating of older sales with a new rates in what he referred to as “re-fried cap rates”, and cap rates as they relate to tax assessments.  

Korpacz stressed throughout his presentation for appraisers to use “methodology that reflects market activity” using published cap rate information together with local comparable sale data and not to rely solely on published data, such as his nationally recognized cap rate “investor survey”.

Britt J. Rosen, CCIM with Peter F. Korpacz MAI, CRE, FRICS
at Miami ASA meeting in Coral Gables, FL.