How can the location of a property affect cap rate?

[Peyton LaBarbera]

I was hoping someone could help me understand first... What types of locations are lower cap rate properties generally found and why?

And... What vice versa for higher cap rate properties?

Thank you,

Peyton LaBarbera

[Russell Brazil]

Class A Locations Low Cap Rate

Class D locations High Cap Rate

Cap rate is a reflection of the risk in the asset and market. The higher the risk, the higher the cap rate. The lower the risk, the lower the cap rate.