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I'm actually not surprised at current prices the Ritz and many condotel properties are at or near 0% cap rates - and condos in general (again at today's prices).
Don't feel abandoned by him. I'm sure he's hurting inside.
This is what you are ignoring,
4.* 10% cap rate means I am paying $100,000 for a $10,000 NOI to get a 10% "return".
5.* 5% cap rate means I am paying $200,000 for a $10,000 NOI to get a 5%*"return".
6.* 10% is higher/more than 5%.
7.* So under your "return" definition the market pays MORE for less "return"????
8.* So under your "return" definition the market pays LESS for more "return"????
9.* This definition defies logic.
10.* Cap rate is not a return.
A cap rate is not about your bad numbers on one condo at the FN Ritz!
Monthly NOI??
60% occupancy??
GET and TAT included in room rate??
Investors buying a negative income stream?? Where's the Income in NOI???
I don't know what you think I'm "ignoring". I have no idea what you're getting at with all those points.
I stated 65% occupancy, not 60%. Read a little slower. 65% is pretty achievable for an ultra-high end project. In fact, Ritz' "average" numbers during "average" times is close to 65%. During great economic times, they push 70% average. You can google for this information instead of wasting your time refuting my statements.
And yes, I included the GET and TAT in the room rates. You can back them out if you want and reduce the actual rate the hotel gets. Either way, it ends up being the same.
For the 5th time, provide us some numbers that refute a 0% cap rate for the Ritz. It is not uncommon for ultra-high end projects to return 0% these days. This is NOT exclusive to the Ritz.
For the 5th time, provide us some numbers that refute a 0% cap rate for the Ritz. It is not uncommon for ultra-high end projects to return 0% these days. This is NOT exclusive to the Ritz.
There is no such thing as a 0% cap rate so there is no need to refute.
You have not been able to provide calculations to support this.
You need NOI to calculate a cap rate. A NET OPERATING INCOME that has no income IS NOT AN INCOME STREAM SO IT IS NOT BOUGHT AND MEASURED BY A CAP RATE.
I don't know what you think I'm "ignoring". I have no idea what you're getting at with all those points.
I stated 65% occupancy, not 60%. Read a little slower. 65% is pretty achievable for an ultra-high end project. In fact, Ritz' "average" numbers during "average" times is close to 65%. During great economic times, they push 70% average. You can google for this information instead of wasting your time refuting my statements.
And yes, I included the GET and TAT in the room rates. You can back them out if you want and reduce the actual rate the hotel gets. Either way, it ends up being the same.
For the 5th time, provide us some numbers that refute a 0% cap rate for the Ritz. It is not uncommon for ultra-high end projects to return 0% these days. This is NOT exclusive to the Ritz.
On another issue. How many RITZ buyers are concerned with cap rate..................hahahaha.
PS for the nonbelieveres- LAS VEGAS condotel s prices are skyrocketing! get yours now. Cap rates of 3-4%. Really.
I don't know what you think I'm "ignoring". I have no idea what you're getting at with all those points.
.
That a cap rate is not a profit metric. That the higher the cap rate the less the market is paying for the exact SAME possible NOI yet you think that is more profitable. See? Please address that.
Jeez - cap rates, while a measurement isn't terribly useful anyway for a SFH or Condo.
Buyers of Ritz properties aren't looking for monthly income anyway. They want to occasionally use the property and hope it wildly appreciated someday.
It's not terribly uncommon to have negative cap properties on Oahu. Plenty of dilapidated shacks sitting on extremely valuable property. If a person buying that property (with the dilapidated house) truly wanted an income stream that was worthwhile they would tear down the house and rebuild (which is happening very frequently nowadays) - practically everyday I'm seeing a new house being built where some old shack previously sat.
Jeez - cap rates, while a measurement isn't terribly useful anyway for a SFH or Condo.
Buyers of Ritz properties aren't looking for monthly income anyway. They want to occasionally use the property and hope it wildly appreciated someday.
It's not terribly uncommon to have negative cap properties on Oahu. Plenty of dilapidated shacks sitting on extremely valuable property. If a person buying that property (with the dilapidated house) truly wanted an income stream that was worthwhile they would tear down the house and rebuild (which is happening very frequently nowadays) - practically everyday I'm seeing a new house being built where some old shack previously sat.
There is no such thing as a negative cap rate. A cap rate measures what a person is paying for an income stream. If there is no income stream you cannot calculate a cap rate.
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