What is cap-rate expansion?
An exit cap rate above the going-in cap, which lowers terminal value even when NOI is unchanged. Leverage magnifies the effect: a 100-bp expansion can cut value ~17% but equity ~48%.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.