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Commercial Real Estate Calculator

Cap Rate Calculator

Find the cap rate for a commercial property using only two numbers: annual NOI and purchase price.

Estimated Cap Rate 7.00% Cap rate = Net Operating Income divided by purchase price.
Inputs

Find the property cap rate

$
NOI means the income left after normal operating expenses. It does not include loan payments, taxes on income, depreciation, or major capital improvements. Need help? Use the NOI Calculator.
$
This is what you plan to pay for the property or what you think the property is worth.
Cap Rate 7.00% This is the property's unlevered return based on NOI and price.
Annual NOI $350,000 Income after operating expenses.
Purchase Price $5,000,000 Price used to calculate the cap rate.
Simple Formula
Annual NOI$350,000
Purchase Price$5,000,000
FormulaNOI ÷ Price
Cap Rate7.00%
What This Means
A 7.00% cap rate means the property produces about $7.00 of NOI per year for every $100 of property value.
Important disclaimer

This calculator is for educational estimates only. Cap rate is only one metric and does not account for financing, capital expenditures, tenant risk, market conditions, tax impacts, or full investment risk.

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