CalculateRealEstateROI

Commercial Real Estate

NOI / Cap-Rate Valuation

Income approach to commercial valuation: NOI ÷ market cap rate = value.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Commercial value is mathematical — raise NOI by $1, value rises $1/cap.

Examples

  • $200k NOI ÷ 6% cap = $3.33M; add $20k NOI = $3.66M (+$333k).

Common mistakes

  • Treating residential comps as relevant to small commercial.

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