Cap Rate Calculator
Derive the capitalisation rate, net operating income and implied value of an income-producing property, with a five-by-five NOI and cap-rate sensitivity matrix.
- US Multifamily
- 5.8%
- Class-B average
- US NNN Retail
- 6.4%
- Long-lease average
- US Office
- 7.9%
- CBD average
Formula & Statutory Rule
Formula
cap_rate = NOI / price × 100
Statutory Rule
NOI = gross_rent − vacancy_loss − operating_expensesRegional Benchmark Reference
| Jurisdiction / Tier | Rate or Limit | Statutory Note |
|---|---|---|
| Multifamily | 5.8% | Class-B |
| NNN Retail | 6.4% | Long lease |
| Office | 7.9% | CBD |
Frequently Asked Questions
What is a good cap rate?
It depends on asset class and market. Lower cap rates imply lower risk and higher pricing; higher cap rates imply higher yield and higher risk.
Does cap rate include debt?
No. Cap rate is unlevered: it uses net operating income before debt service.
How is NOI calculated?
NOI is gross scheduled rent less vacancy loss and operating expenses, excluding debt service, capital expenditure and income tax.
Can I solve for price?
Yes. Enter a target cap rate and the calculator solves the implied purchase price from NOI.