The so called CAP rate CAPitalizes the income stream from an asset into perpetuity.
So if the property income is $80,000 per year and the CAP rate is 8% then the property is worth $1M. You then decide to put a mortgage on the property, or not, or to what loan-to-value (LTV). Some folks like high leverage with a high LTV, with little cash down but little cash-flow. Others prefer a lower LTV with more cash-flow. That leverage does not influence the property value.
CAP rates of course are influenced by a number of factors, such as location, property size, risk, bond rates, demand, stock market volatility, age of asset, unit size, quality of construction, vacancies etc. ...