8.12 VALUATION OF SINGLE-TENANT PROPERTIES. Refer to The Appraisal Journal (Summer 2019) study of the valuation of single-tenant properties, Exercise 6.36 (p. 330). Recall that the ratio of net operating income to property asset value?called the capitalization rate?was determined for a sample of 13 retail property tenants. Data on S&P credit ratings and 5-year capitalization rates for the 13 tenants are reproduced in the table. An appraiser wants to compare the mean 5-year capitalization rate of all single-property retail tenants with low (BBB-) S&P ratings with the corresponding mean for high (A, AA-, or AA) S&P ratings. Identify the target parameter for this study. Compute a point estimate of the target parameter. What is the problem with using the normal (z) statistic to find a confidence interval for the target parameter? Find a 90% confidence interval for the target parameter. Use the interval, part d, to make a statement about the difference in mean 5-year capitalization rates for single-property retail tenants with the two S&P ratings. What conditions must be satisfied for the inference, part e, to be valid?

a. Identify the target parameter for this study.

b.Compute a point estimate of the target parameter.

c.What is the problem with using the normal (z) statistic to find a confidence interval for the target parameter?

d.Find a 90% confidence interval for the target parameter.

e. Use the interval, part d, to make a statement about the difference in mean 5-year capitalization rates for single-property retail tenants with the two S&P ratings.