Commercial Asset Partners

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CAP Rate in 3 Simple Steps

CAP rates help sellers price their property competitively and helps buyers make informed decisions.

1️⃣ What It Is
Cap Rate = Net Operating Income (NOI) ÷ Property Value
👉 A quick way to measure the return on a property.
For example, if a property generates $100,000 in annual net operating income and is valued at $1,250,000, the cap rate would be:
$100,000 ÷ $1,250,000 = 8% cap rate

2️⃣ What It Tells You
✔️ Higher Cap Rate = Higher potential return (but usually higher risk)
✔️ Lower Cap Rate = Lower return (but often more stability)

3️⃣ Why It Matters
✅ Helps investors compare properties
✅ Guides owners in pricing their property
✅ Shows risk vs. reward at a glance

Key Tip: Cap rate is a snapshot of return—it’s helpful, but always consider other factors like financing, market trends, and tenant strength.

Trust a licensed broker at to help you make real estate decisions. Certified Commercial Investment Members (CCIM)

This Memorial Day, we pause to honor the brave men and women who gave their lives in service to our country. Their sacrifice grants us the freedom to pursue our lives, careers, and time with the ones we love.

May we carry their legacy forward with gratitude and hope. This weekend, let’s remember, reflect, and hold our loved ones close.

Wishing you a safe and meaningful Memorial Day. 🇺🇸