CRE Tools · Valuation
Cap Rate & Property Value Calculator
Solve for value, cap rate, or NOI — then see how sensitive value is to the cap rate.
Retail Blueprint · Calculator
Value = NOI ÷ Cap Rate
Enter 6.5 for 6.5%.
Property value
$1,538,462
- 5.50%$1,818,182
- 6.00%$1,666,667
- 6.50% ◆$1,538,462
- 7.00%$1,428,571
- 7.50%$1,333,333
When NOI remains constant, lower cap rates imply higher property values and higher cap rates imply lower property values.
Understand the metric
01
What this metric means
The capitalization rate expresses a property's NOI as a percentage of its value. It is a snapshot of the relationship between income and price, not a measure of total return.
02
Why it matters
Small changes in cap rate move value significantly. When NOI is constant, lower cap rates imply higher values and higher cap rates imply lower values.
03
How it is calculated
- Value = NOI ÷ Cap rate
- Cap rate = NOI ÷ Value
- NOI = Value × Cap rate
- A 6% cap rate is 0.06 in the formula
04
Related concepts
- Net operating income
- Cash-on-cash return (a different measure)
- Tenant credit and lease term
- Market pricing and comparable sales
Watch & Learn · In production
Cap rates explained — Retail Blueprint video
An original Retail Blueprint video will appear here when published.
Retail Blueprint tools are provided for educational and informational purposes only. Results are estimates based on the information entered and simplified assumptions. They should not be considered investment, financial, lending, legal, tax, or accounting advice. Actual property performance, financing terms, expenses, returns, and valuation may differ.