Dictionary of Business Terms: recapture rate
recapture rate
in appraisal, rate of recovery of an investment in a wasting asset. This rate is added to the discount rate to derive a capitalization rate in appraisal terminology. It may be based on the straight-line, sinking fund, or annuity method.
Dictionary of Real Estate Terms: recapture rate
recapture rate
in appraisal, a term used to describe the rate of recovery of an investment in a wasting asset. This rate is added to the discount rate to derive a capitalization rate in appraisal terminology. May be based on the straight-line, sinking fund, or annuity method.
Example: A building with a 50-year estimated useful life has a 2% straight-line recapture rate. At a discount rate of 10%, the capitalization rate is 12%.
