Cap rate & value calculator.
The cap-rate triangle: value, cap rate, and NOI. Enter any two and get the third instantly — whether you're pricing a property to sell, checking a listing's asking cap, or backing into the income a deal needs.
A cap rate is only as good as the NOI under it.
Send me the property and the rent roll. I'll rebuild the NOI the way a buyer will and tell you what cap rate comparable buildings actually traded at.
Estimates are for planning only and use simplified assumptions — not tax, legal, or investment advice. Verify with your lender, CPA, and a full broker analysis before acting.
A cap rate is a conclusion, not an input
Every cap rate you see quoted was derived by dividing somebody's NOI by somebody's price. Change either and the rate changes, which is why two brokers can describe the same building as a 6 and a 7.5 without either lying.
The NOI is where it happens. Vacancy assumed at zero on a fully leased building, no management fee because the owner self-manages, no reserve for the roof that is fifteen years old. Strip those three out and a 6.5 becomes a 5.4 — and a buyer's lender will strip them out during underwriting whether or not the seller did.
So when you use the number above, the useful question is not what cap rate to apply. It is whether the income underneath it would survive a buyer rebuilding it from scratch.
What actually sets the rate for your building
Asset type first — industrial, retail and office price differently in the same submarket and always have. Then location down to the corridor. Then lease structure: remaining term, credit of the tenant, whether it is net or gross, and whether escalations are real.
Condition matters more than sellers expect, because deferred maintenance is priced as a deduction from value rather than a lower rate. And finally the debt market — when financing tightens, cap rates widen regardless of anything happening in the building.
Across recorded tri-county commercial sales, median price per square foot ran from $255 in 2021 to $373 in 2025 while sale volume fell about 46%. Thin markets make individual comps less reliable, which is an argument for getting several rather than trusting one.
Common questions
What is a good cap rate for commercial property?
There is no universally good number. It depends on asset type, submarket, lease structure and the debt market at the time. A higher cap rate means more income per dollar of price, which usually also means more risk. Compare against recorded sales of similar buildings in the same submarket rather than a national average.
Why do two brokers quote different cap rates for the same building?
Because they are using different NOIs. Vacancy assumed at zero, no management fee and no capital reserve will produce a materially higher rate than a normalized income statement. A buyer's lender will normalize it, so the seller may as well.
Should I use a cap rate to value my own building?
As a cross-check, not as the method. Cap rate valuation is only as good as the NOI beneath it and the comparable rates you apply. For a decision about selling, comparable sales chosen for similarity to your building are more defensible.
How do you calculate cap rate?
Cap rate = net operating income (NOI) ÷ property value, expressed as a percentage. For example, a property with $150,000 NOI valued at $2,300,000 has a cap rate of about 6.5%. Rearranged, value = NOI ÷ cap rate, and NOI = value × cap rate. This calculator solves for whichever one you leave out.
Does a higher cap rate mean a better deal?
Not necessarily. A higher cap rate means more income relative to price, but it often signals more risk — a weaker location, shorter leases, or deferred maintenance. A lower cap rate usually means a safer, more desirable asset. Judge the cap against comparable sales, not in isolation.
