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Cross-sector · AI infrastructure
This educational model starts with an example asset's annual net operating income and applies different cap rates and growth assumptions to show how the estimated asset value changes.
Base-case example asset value
US$1,333m
Based on the conditions listed in “Balanced duration.”
Blended scenario result
US$1,315m
This combines the displayed scenarios using the model weights. The weights are judgment calls, not statistical guarantees.
This educational model starts with an example asset's annual net operating income and applies different cap rates and growth assumptions to show how the estimated asset value changes.
How do interest rates, income growth, and cap rates change the value of a stabilized infrastructure asset?
This is not a company DCF and it does not estimate a stock's value per share. It is a simplified asset-pricing framework for understanding how required returns, long-term yields, growth, and financing conditions affect infrastructure values.
The result is the estimated value of the example asset in USD millions. It should be used to understand valuation mechanics, not as an investment conclusion about a specific company.
A DCF estimates present value from future cash flows. This page may also use project probabilities, cap rates, net asset value, or sum-of-the-parts methods where they fit the asset better. The model type is shown above and explained here before the detailed tables.
Use these sections in order or jump directly to the part you need. The plain-language explanation comes first; the detailed assumptions, formulas, sources, and change log remain available underneath it.
Use the spreadsheet to inspect formulas or change assumptions. JSON and CSV versions are available for structured review and data reuse.
Model overview
Main question
How do interest rates, income growth, and cap rates change the value of a stabilized infrastructure asset?
Technical approach
Cap-rate, duration, and bond-yield sensitivity
Company or asset
Cross-sector
Estimate date
Aug 2, 2026
Years modeled
10-year stabilized asset framework
Currency
USD
Output type
Illustrative asset value in USD millions
Research status
Methodology tool
Model author
Ephesus Research
Last updated
Aug 2, 2026
Linked sources
1 records
Version
0.4.0-sample
3 possible outcomes
The base case is the central set of assumptions, not a guaranteed result. Compare every named scenario to see how delays, weaker economics, stronger execution, financing, or other major changes affect the estimate. Any edge case is deliberately kept separate from the central forecast. The weights are model judgments and should change when the evidence changes.
| Scenario | Example asset valueUSD millions | Weight in blended result | What has to be true | Main risks |
|---|---|---|---|---|
| Higher-for-longer | US$1,050m | 30% |
|
|
| Balanced duration | US$1,333m | 50% |
|
|
| Strong contracted growth | US$1,667m | 20% |
|
|
Inputs behind the result
Start with inputs marked low confidence. Those are the assumptions most likely to need more evidence and can be more important than the final headline number. Each row shows whether the value is a fact, company statement, analyst estimate, model assumption, or inference.
| Input | Value used | Case | Evidence type | Where it came from | Information date | Confidence | Why it matters or what remains uncertain |
|---|---|---|---|---|---|---|---|
| Stabilized annual NOI | 100 USD millions | All | Model Assumption | Normalized illustrative NOI | Aug 2, 2026 | High | Unit base for comparing valuation outcomes. |
| Long-duration risk-free reference yield | 5 % | Base | Model Assumption | Illustrative market input | Aug 2, 2026 | Low | Replace with the chosen tenor and current market observation. |
| Asset and equity risk premium over debt | 2.5 % | Base | Model Assumption | Illustrative risk premium | Aug 2, 2026 | Low | Should reflect leverage, development stage, lease quality, liquidity, and residual value. |
Change the assumptions
Each grid changes two assumptions at the same time. Find the row and column matching your view, then read the value where they meet. A wide range of outcomes means the estimate is highly sensitive to those inputs.
Read across or down to choose two assumptions. The value where the row and column meet is the model result under that combination.
Simplified one-year forward NOI capitalization; growth is shown to force explicit discussion, not added mechanically to cap rate.
#cap-rate-growth-sensitivity| Change Cap rate ↓ and NOI growth → | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
| 6 | 1,667 | 1,683 | 1,700 | 1,717 | 1,733 |
| 7 | 1,429 | 1,443 | 1,457 | 1,471 | 1,486 |
| 8 | 1,250 | 1,263 | 1,275 | 1,288 | 1,300 |
| 9 | 1,111 | 1,122 | 1,133 | 1,144 | 1,156 |
| 10 | 1,000 | 1,010 | 1,020 | 1,030 | 1,040 |
Read across or down to choose two assumptions. The value where the row and column meet is the model result under that combination.
#debt-equity-return-sensitivity| Change Debt yield ↓ and Equity premium → | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| 5.5 | 6.5 | 7.5 | 8.5 | 9.5 | 10.5 |
| 6.5 | 7.5 | 8.5 | 9.5 | 10.5 | 11.5 |
| 7.5 | 8.5 | 9.5 | 10.5 | 11.5 | 12.5 |
| 8.5 | 9.5 | 10.5 | 11.5 | 12.5 | 13.5 |
| 9.5 | 10.5 | 11.5 | 12.5 | 13.5 | 14.5 |
These are not footnotes to ignore. They identify missing evidence, simplified calculations, or events that could make the displayed value incomplete or too high.
Evidence
A source may confirm a reported fact or management plan without proving that the forecast will occur. Open a source card to see what it supports and what remains uncertain.
Jul 31, 2026 · United States
Relevant finding
Primary reference for nominal Treasury yields used in duration comparisons.
Review notes
Capture exact observation date and maturity.
Revision history
Material updates are recorded so readers can see which assumption or conclusion changed, why it changed, and how the result was affected.
Aug 2, 2026
Raised the illustrative base discount rate by 100 basis points.
Previous
10.5%
Revised
11.5%
Reason
Demonstrates duration sensitivity when long-end yields and financing spreads rise.
Source
U.S. Treasury market-data framework; values remain illustrative
Estimated effect
Lowered long-duration asset value, with the largest effect on later phases and terminal value.
Further reading
IREN · WULF · CIFR · APLD · NUAI
A practical framework for understanding when higher long-duration yields should compress infrastructure values and when contracted NOI growth can offset part of the pressure.
Report a formula error, unsupported assumption, missing source, or unclear explanation. Material corrections are added to the public revision history rather than silently overwritten.