What is market extraction?
Deriving cap rates from comparable transactions: divide each comp’s NOI by its sale price and use the resulting cap rates as evidence for the subject. The most common method, but it needs recent, arm’s-length, truly comparable sales.
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.