Commercial Property Cap Rate Calculator
ANA›Life Services Authority›National Calculator Authority›Commercial Property Cap Rate Calculator
.calc-container { max-width: 640px; margin: 2rem 0; padding: 1.5rem; background: #fff; border: 1px solid #ddd; border-radius: 8px; box-shadow: 0 1px 3px rgba(0,0,0,0.06); font-family: system-ui, -apple-system, sans-serif; } .calc-container h3 { font-family: Georgia, serif; font-size: 1.15rem; color: #1a1a1a; margin-bottom: 1rem; padding-bottom: 0.5rem; border-bottom: 2px solid var(--ac, #3d5a80); } .calc-row { display: flex; align-items: center; gap: 0.75rem; margin-bottom: 0.75rem; flex-wrap: wrap; } .calc-row label { min-width: 160px; font-size: 0.9rem; color: #333; font-weight: 500; } .calc-row input[type="number"], .calc-row select { flex: 1; min-width: 120px; max-width: 200px; padding: 0.5rem 0.6rem; border: 1px solid #ccc; border-radius: 4px; font-size: 0.9rem; font-family: system-ui, sans-serif; color: #1a1a1a; background: #fafaf8; } .calc-row input:focus, .calc-row select:focus { outline: none; border-color: var(--ac, #3d5a80); box-shadow: 0 0 0 2px rgba(26,74,138,0.12); } .calc-row .unit { font-size: 0.82rem; color: #888; min-width: 30px; } .calc-btn { display: inline-block; margin-top: 0.5rem; padding: 0.55rem 1.5rem; background: var(--ac, #3d5a80); color: #fff; border: none; border-radius: 4px; font-size: 0.9rem; font-weight: 600; cursor: pointer; font-family: system-ui, sans-serif; } .calc-btn:hover { opacity: 0.9; } .calc-result { margin-top: 1.25rem; padding: 1rem 1.25rem; background: #f0f6fc; border-left: 3px solid var(--ac, #3d5a80); border-radius: 0 6px 6px 0; display: none; } .calc-result.visible { display: block; } .calc-result-label { font-size: 0.78rem; text-transform: uppercase; letter-spacing: 0.06em; color: #666; margin-bottom: 0.25rem; } .calc-result-value { font-size: 1.6rem; font-weight: 700; color: var(--ac, #3d5a80); } .calc-result-detail { font-size: 0.85rem; color: #555; margin-top: 0.5rem; line-height: 1.5; } .calc-note { margin-top: 1rem; font-size: 0.8rem; color: #888; font-style: italic; } .calc-grid { display: grid; grid-template-columns: 1fr 1fr; gap: 0.75rem; margin-top: 0.75rem; } .calc-grid-item { padding: 0.6rem 0.8rem; background: #f8f9fa; border-radius: 4px; border: 1px solid #eee; } .calc-grid-item .label { font-size: 0.75rem; color: #888; text-transform: uppercase; letter-spacing: 0.04em; } .calc-grid-item .value { font-size: 1.1rem; font-weight: 600; color: #1a1a1a; } @media (max-width: 720px) { .calc-row { flex-direction: column; align-items: flex-start; gap: 0.3rem; } .calc-row label { min-width: auto; } .calc-row input[type="number"], .calc-row select { max-width: 100%; width: 100%; } .calc-grid { grid-template-columns: 1fr; } } .calc-chart { margin: 1rem 0; text-align: center; } .calc-chart svg { max-width: 100%; height: auto; } .calc-chart-legend { display: flex; flex-wrap: wrap; justify-content: center; gap: 0.6rem 1.2rem; margin-top: 0.6rem; font-size: 0.8rem; color: #555; } .calc-chart-legend span { display: inline-flex; align-items: center; gap: 0.3rem; } .calc-chart-legend i { display: inline-block; width: 10px; height: 10px; border-radius: 2px; font-style: normal; } .calc-related { max-width: 640px; margin: 2rem 0 1rem; padding: 1.25rem 1.5rem; background: #f8f9fa; border: 1px solid #e8e8e8; border-radius: 8px; } .calc-related h3 { font-family: Georgia, serif; font-size: 1rem; color: #1a1a1a; margin: 0 0 0.75rem; padding-bottom: 0.4rem; border-bottom: 2px solid var(--ac, #3d5a80); } .calc-related-list { list-style: none; padding: 0; margin: 0 0 0.75rem; display: grid; grid-template-columns: 1fr 1fr; gap: 0.4rem 1.5rem; } .calc-related-list li a { font-size: 0.88rem; color: var(--ac, #3d5a80); text-decoration: none; } .calc-related-list li a:hover { text-decoration: underline; } .calc-browse-all { margin: 0.5rem 0 0; font-size: 0.9rem; font-weight: 600; } .calc-browse-all a { color: var(--ac, #3d5a80); text-decoration: none; } .calc-browse-all a:hover { text-decoration: underline; } @media (max-width: 720px) { .calc-related-list { grid-template-columns: 1fr; } }
Commercial Property Cap Rate Calculator
Calculate the capitalization rate (Cap Rate) for a commercial property investment to evaluate its potential return and value.
Annual Gross Rental Income ($)
Vacancy & Credit Loss Rate (%)
Annual Operating Expenses ($)
Current Property Value / Purchase Price ($)
Calculate Cap Rate
function comCalc() { var resultDiv = document.getElementById('com-result');
var grossIncome = parseFloat(document.getElementById('com-gross-income').value); var vacancyRate = parseFloat(document.getElementById('com-vacancy-rate').value); var operatingExp = parseFloat(document.getElementById('com-operating-expenses').value); var propertyValue = parseFloat(document.getElementById('com-property-value').value);
// --- Input Validation --- var errors = []; if (isNaN(grossIncome) || grossIncome 100) errors.push("Vacancy & Credit Loss Rate must be between 0 and 100."); if (isNaN(operatingExp) || operatingExp 0) { resultDiv.style.display = 'block'; resultDiv.innerHTML = 'Please fix the following:' + errors.map(function(e){ return ''; }).join('') + ''; return; }
// --- Core Calculations --- // Effective Gross Income (EGI) = Gross Income × (1 - Vacancy Rate) var egi = grossIncome * (1 - vacancyRate / 100);
// Net Operating Income (NOI) = EGI - Operating Expenses var noi = egi - operatingExp;
// Cap Rate = NOI / Property Value × 100 var capRate = (noi / propertyValue) * 100;
// Gross Rent Multiplier (GRM) = Property Value / Gross Income var grm = grossIncome > 0 ? (propertyValue / grossIncome) : null;
// Operating Expense Ratio (OER) = Operating Expenses / EGI × 100 var oer = egi > 0 ? (operatingExp / egi) * 100 : null;
// Implied Property Value at market cap rates (6%, 7%, 8%) var impliedVal6 = noi > 0 ? (noi / 0.06) : null; var impliedVal7 = noi > 0 ? (noi / 0.07) : null; var impliedVal8 = noi > 0 ? (noi / 0.08) : null;
// --- Rating --- var rating = ''; var ratingClass = ''; if (capRate >= 8) { rating = 'Excellent (High Return)'; ratingClass = 'calc-good'; } else if (capRate >= 6) { rating = 'Good (Market Rate)'; ratingClass = 'calc-good'; } else if (capRate >= 4) { rating = 'Fair (Below Market)'; ratingClass = 'calc-warn'; } else if (capRate > 0) { rating = 'Low (Consider Carefully)'; ratingClass = 'calc-warn'; } else { rating = 'Negative NOI — Property is Cash-Flow Negative'; ratingClass = 'calc-bad'; }
function fmt(n) { return n.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); } function fmtPct(n) { return n.toFixed(2) + '%'; } function fmtDollar(n) { return '$' + fmt(n); }
var html = '### Cap Rate Results '; html += ''; html += '' + fmtPct(capRate) + ''; html += 'Capitalization Rate'; html += '' + rating + ''; html += '';
html += 'MetricValue'; html += 'Annual Gross Rental Income' + fmtDollar(grossIncome) + ''; html += 'Vacancy & Credit Loss (' + fmtPct(vacancyRate) + ')- ' + fmtDollar(grossIncome * vacancyRate / 100) + ''; html += 'Effective Gross Income (EGI)' + fmtDollar(egi) + ''; html += 'Annual Operating Expenses- ' + fmtDollar(operatingExp) + ''; html += 'Net Operating Income (NOI)' + fmtDollar(noi) + ''; html += 'Property Value / Purchase Price' + fmtDollar(propertyValue) + ''; html += 'Cap Rate' + fmtPct(capRate) + ''; if (grm !== null) html += 'Gross Rent Multiplier (GRM)' + fmt(grm) + 'x'; if (oer !== null) html += 'Operating Expense Ratio (OER)' + fmtPct(oer) + ''; html += '';
if (noi > 0) { html += '#### Implied Property Value at Market Cap Rates '; html += 'Market Cap RateImplied Valuevs. Purchase Price'; var benchmarks = [[6, impliedVal6], [7, impliedVal7], [8, impliedVal8]]; benchmarks.forEach(function(b) { var diff = b[1] - propertyValue; var diffClass = diff >= 0 ? 'calc-good' : 'calc-bad'; var diffStr = (diff >= 0 ? '+' : '') + fmtDollar(diff); html += '' + b[0] + '%' + fmtDollar(b[1]) + '' + diffStr + ''; }); html += ''; }
resultDiv.style.display = 'block'; resultDiv.innerHTML = html; }
#### Formulas Used
Step 1 — Effective Gross Income (EGI): EGI = Gross Rental Income × (1 − Vacancy Rate)
Step 2 — Net Operating Income (NOI): NOI = EGI − Annual Operating Expenses
Step 3 — Capitalization Rate: Cap Rate (%) = (NOI ÷ Property Value) × 100
Gross Rent Multiplier (GRM): GRM = Property Value ÷ Gross Rental Income
Operating Expense Ratio (OER): OER (%) = (Operating Expenses ÷ EGI) × 100
Implied Property Value: Implied Value = NOI ÷ Benchmark Cap Rate
#### Assumptions & References
- Operating expenses include property taxes, insurance, maintenance, property management fees, utilities, and repairs — but exclude mortgage payments, depreciation, and income taxes (NOI is pre-financing).
- Reference: Appraisal Institute — The Appraisal of Real Estate, 15th Edition; CBRE Cap Rate Survey 2024.
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