Cap rate for Real Estate

CFA Level III Alternative Investments
#1

Could someone please enlighten why the following is true?
“Cap rates are positively related to changes in interest rates and vacancy rates. They are inversely related to the availability of credit and the availability of debt financing”

Shouldn’t higher vacancy rate result in lower Cap rate? Given you basically earn less with higher vacancy rate and it gives you lower NOI and lower Cap rate.

And why is that with credit/debt being more available the Cap rate would decrease?

thank you!

#2

Cap rate=NOI/apprised value
You want your NOI to be lower?

#3

Think of it in relation to valuation. Higher vacancy rates = no bueno, so that should result in a lower price, right? The higher the cap rate, the lower the current valuation of that particular valuation all else equal.