Calculate capitalization rate, property value, or required NOI. The essential metric for comparing commercial real estate investments.
Cap Rate = NOI ÷ Property Value × 100
Typically indicate prime locations, strong tenants, and lower perceived risk. Common in core urban markets with credit tenants on long-term leases.
Balance of risk and return. Common for stabilized retail assets in suburban markets with good tenant mix and solid fundamentals.
Higher perceived risk but greater potential returns. May indicate value-add opportunities, secondary markets, or properties needing repositioning.