Question about cap rates and FFO

CFA Level II
#1

I one solution to the topic tests it says: "A lower capitalization rate (i.e., a lower NOI with such other parameters as interest costs and corporate expenses being the same) implies a lower FFO "

Value = NOI/cap. Hence, a lower cap implies a higher value, and should not then a higher value correspond to a higher FFO?

#2

Can you refer the book, chapter and page where this appers? Want to check the context of the word.

Thanks

#3

There was another thread on exactly this question a couple of weeks ago. Try the search function.

The short answer is that the statement assumes that the property value remains the same.

#4
  1. An analyst gathers the following information for two REITs:

Price/NAV

Capitalization rate used in NAV

REIT A

100%

6%

REIT B

99%

8%

If the REITs have similar property portfolio values, interest expense, and corporate overhead, which REIT most likely has the higher Price/FFO?

Solution to 1: REIT A is correct. A lower capitalization rate (i.e., a lower NOI with such other parameters as interest costs and corporate expenses being the same) implies a lower FFO and hence a higher P/FFO ratio if P/NAV ratios are similar, as is the case here.