TSX:AX.PR.E - Post by User
Comment by
Torontojayon Jun 21, 2024 1:18pm
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Post# 36100312
RE:RE:RE:RE:IT HAS TO BE NOW
RE:RE:RE:RE:IT HAS TO BE NOW
Frankie10 wrote: Looking forward, I think it's doubtful cap rates expand from here, and debt is likely to get cheaper. US assets should in theory become more valuable in CAD terms should BoC and Fed divergence widens.
Theory and practice don't always converge. They can diverge for a long time before it begins to make sense again. There are two ways for property values to decline.
1) earnings contraction
2) multiple contraction; that is, the multiple investors are willing to pay on earnings contract.
You can have a constant cap yield but declining earnings and that could contribute to a lower valuation.