Choosing Between Direct Real Estate Investments

Michael, a seasoned real estate investor, is considering making a direct investment in an office building located in a prime urban area. He has analyzed the building's cash flow projections, market trends, and comparable sales data. Michael is particularly focused on two key financial metrics: the capitalization rate (cap rate) and the internal rate of return (IRR). He is comparing a property that has a projected IRR of 12% and a cap rate of 8% against another property with an IRR of 10% and a cap rate of 9%. Given the current market conditions and the financial metrics, which property should Michael select for his direct investment?