Cap rates are important to know because you can compare it to the cap rate in the market. A “going-in” cap rate that is higher than the market cap rate is good; it means that the property is purchased below market. However, if the sponsor’s business plan is distressed or value-add, then the cap rate doesn’t matter all that much because net operating income would be lower than at purchase. In which case, you would want to know the “stabilized cap rate” vs. market cap rate. In this scenario, you would want the stabilized cap rate to be higher than the market cap rate.