Commercial Property Valuation Calculator
Estimate your property’s value using rental income, expenses, and a cap rate.
How the Estimate Is Calculated
Estimated value = net operating income ÷ cap rate.
- 01
Annual rent
Start with the annual rent the property could generate at full occupancy.
- 02
Net operating income (NOI)
Subtract vacancy losses and operating expenses from annual rent to get net operating income.
- 03
Estimated value
Divide net operating income by the cap rate, expressed as a decimal, to estimate property value.
- 04
Value per square foot
Divide the estimated value by the building’s square footage to compare it with similar properties.
Cap Rates by Property Type
These ranges are starting points. Choose a cap rate based on recent sales of similar properties in your area.
| Property type | Starting range | Lower rate / higher value | Higher rate / lower value |
|---|---|---|---|
| Industrial / Warehouse | 6.5% to 8% | Clear height, dock doors, interstate access, long NNN lease | Older metal building, low ceilings, short lease, single tenant risk |
| Flex / Light Industrial | 7% to 8.5% | Multi-tenant with staggered leases, modern finishes | High office ratio, dated space, heavy vacancy history |
| Retail | 6.5% to 8.5% | National credit tenant, corporate guarantee, 10+ years of term | Local tenants, month-to-month leases, weak traffic counts |
| Office | 8% to 10% | Full occupancy, professional or government tenants, ample parking | Vacancy, deferred maintenance, large floor plates to re-lease |
| Medical Office | 7% to 8.5% | Hospital-affiliated tenant, built-out exam rooms, long lease | General-purpose build-out, independent practice nearing retirement |
| Multifamily (5+ units) | 5.75% to 7.25% | Newer construction, in-place rents at market, low turnover | Below-market rents, capital needs, older systems |
| Self-Storage | 6.25% to 7.75% | Climate control, gated access, strong occupancy, room to expand | Drive-up only, soft occupancy, new supply nearby |
| Mixed-Use / Other | 7% to 9% | Stabilized income, strong downtown location | Special-purpose space, management-intensive tenant mix |
For the same income, a lower cap rate gives a higher value. A higher cap rate gives a lower value.
What the Estimate Excludes
- Lease length and renewal terms.
- Tenant credit and payment history.
- Building condition and major repairs.
- Rents above or below market rates.
- Land value and development potential.
- Recent sales of similar properties.
Related Guides
What Is My Commercial Property Worth?
How commercial valuations work: cap rates, comparables, and the levers that move your building's price before you go to market.
Triple-Net (NNN) Leases Explained
What landlords and tenants need to know about NNN leases, expense pass-throughs, and structuring terms that hold up.
A Simple Guide to 1031 Exchanges
Defer capital gains when you sell and reinvest. Timelines, rules, and how to structure an exchange the right way.
Frequently Asked Questions
How accurate is the estimate?
It depends on the income, expenses, and cap rate you enter. The calculator does not assess the property or verify your inputs. Use the result as a starting point for a broker review or appraisal.
Which cap rate should I use?
Use a rate from recent sales of similar properties nearby. The preset rates are starting points. A broker can help you choose a rate for your property.
What counts as operating expenses?
Include property taxes, insurance, maintenance, management, and utilities you pay. Exclude mortgage payments, depreciation, income taxes, and costs paid directly by tenants.
Can I use this for an owner-occupied building?
Yes. Enter the rent you could charge a tenant and the expenses you would pay as the landlord. Add the building size and a comparable sale price per square foot to compare the two estimates.
Does it work for land?
No. This calculator uses rental income. Land needs a separate valuation based on comparable sales and development potential.
Why does it differ from my tax assessment?
Your tax assessment may use a different valuation date and method. This estimate uses the income and cap rate you enter.
How do I request a broker review?
Use the contact page to share your property details with our team. Your calculator inputs are not sent automatically. A broker can review comparable sales and lease rates to provide an opinion of value.