Reverse Cap Rate Calculator

About this calculator

The standard capitalization rate formula divides a property's net operating income by its value to express return as a percentage (Cap Rate = NOI ÷ Value). Running that formula in reverse answers a different question: given a target property value and a market cap rate, how much net operating income does the property need to generate to justify that value? The math is simply NOI = Target Value × Cap Rate.

This calculator takes a target value and a cap rate and returns the required NOI. Commercial real estate investors underwriting an acquisition, appraisers checking whether a listed asking price is supported by current income, and developers pro forma-ing a project's required rents use it to work backward from a purchase price or valuation target to the operating performance the property must hit — a quick sanity check before diving into a full income and expense pro forma.