Cap Rate & NOI Calculator for Commercial Real Estate
Estimate net operating income, capitalization rate, and gross rent multiplier to size up a commercial property before you buy.
Buying the building? Review the contract with the Commercial Purchase Agreement analyzer to surface risk and cost clauses.
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How to use this cap rate & NOI calculator
- Enter the purchase price (or current market value) of the property.
- Add the gross annual rental income, then set an estimated vacancy & credit loss percentage.
- Enter annual operating expenses (taxes, insurance, CAM, management) — excluding mortgage and income taxes.
- Read off the NOI, cap rate, and gross rent multiplier, then compare against similar deals.
For the most reliable estimate, ask the seller for the current rent roll, a trailing-12-month operating statement, and the property tax assessment.
Cap rate due-diligence checklist
- Rent roll: Are the rents in place, market, or pro-forma? Any concessions or short remaining terms?
- Vacancy: Is the assumed vacancy realistic for the submarket and asset class?
- Operating expenses: Are taxes, insurance, CAM, and management complete — and will taxes reassess on sale?
- Excluded items: Capital expenditures, debt service, and income taxes sit below NOI — budget for them separately.
- Comparables: How does this cap rate compare to recent sales of similar properties nearby?
New to the terminology? Browse plain-English definitions in the Glossary.
Cap rate & NOI FAQs
This tool provides general, educational estimates and is not financial or legal advice.