This article e;plores two sources of cap
rate risk. ;ne is interest rate risk ;olatility.
;oes an increase in interest rates
necessarily increase cap rates; The other source
is cap rate uncertainty at the time an in;es-tor sells a property. n ;rokers and many
in;estors belie;e that rising interest rates will
necessarily increase cap rates and that the
percentage increase in the cap rate will
be one for one. The recei;ed wisdom
in this case is wrong.