Which method is NOT typically used to develop an overall capitalization rate?

The cost approach is not typically used to develop an overall capitalization rate because it primarily focuses on estimating the value of a property based on the cost to reproduce or replace the improvements, minus depreciation, and does not inherently take into account the income generated by the property. Cap rates are commonly derived from income-producing properties, reflecting the relationship between the income the property generates and its value.

In contrast, the band of investments method involves analyzing the cost of equity and debt in financing an investment, focusing on the returns expected from both components. The net income ratio method calculates capitalization rates based on the ratio of net income to property value, making it relevant in income analysis. Similarly, the derivation from comparable sales method assesses the capitalization rates based on income information from similar properties that have sold recently, providing a market-driven rate. Therefore, the cost approach does not align with the methods that directly relate the property's income-generating potential to the capitalization rate.