Cap Rate Calculator

The capitalization rate is the most common metric for evaluating commercial real estate. Calculate the cap rate from NOI and property value, or reverse it to find the implied property value for a target cap rate.

Net Operating Income (NOI) ($/yr)

Property Value ($)

NOI = Gross Rental Income − Operating Expenses (taxes, insurance, maintenance, management). Does NOT include mortgage payments.

A higher cap rate means higher return but also higher risk. Class A properties in major cities often have 4–5% cap rates. Class B suburban properties typically trade at 6–8%. Value-add deals may show 8–12%+.