When a property is purchased, it may have been analyzed based on a specific holding period, such as a 10-year discounted cash flow analysis. This does not mean that the investor actually plans to sell after 10 years. Once the property is purchased, things may change such that actual rents or vacancy rates differ from what was expected when the property was originally purchased. The decision whether to sell after the property has been purchased must be forward looking as discussed above.

Comparing CAP or ROI rates under these circumstances typically requires discounting the cash flows back to a present value while taking into consideration the time value of money. St. Arnold Commercial has the real estate and financial knowledge to assist client by providing the analysis to compare different investment alternatives on an “even playing field”. This form of analysis can help investors to make the best investment decisions.