Free tool · Income-producing property
Commercial Property Value Calculator
Estimate what your income-producing commercial property is worth using net operating income (NOI) and cap rate — the same method buyers and lenders use for retail, office, industrial, and multifamily investments.
This calculator gives a rough estimate only, based on the numbers you enter. It is not an appraisal or a Broker Opinion of Value, and it isn't investment, tax, or legal advice. Actual value depends on lease terms, tenant credit, property condition, and current market conditions.
How it works
Value = NOI ÷ Cap rate
Investors buy commercial property for its income. Net operating income (NOI) is what the property earns in a year after operating expenses. The cap rate is the return buyers in your market currently expect from that type of property. Divide one by the other and you get what a buyer would likely pay.
Example: a retail center collecting $180,000 a year with $55,000 in expenses has an NOI of $125,000. At a 7.5% cap rate, that's an estimated value of about $1,667,000. At 7.0%, it's about $1,786,000. A half-point change in cap rate moved the value by roughly $119,000 — which is why using the right cap rate matters.
Questions
Commercial property value FAQ
How do you calculate the value of a commercial property?
For income-producing property, value is estimated by dividing net operating income (NOI) by the market cap rate. NOI is the property's annual income minus its annual operating expenses. A property with $100,000 of NOI in a market trading at a 7% cap rate is worth roughly $1,430,000.
What expenses are included in NOI?
Operating expenses include property taxes, insurance, repairs and maintenance, property management, owner-paid utilities, and common-area costs. Mortgage payments, depreciation, and major capital projects like a full roof replacement are not operating expenses and are left out of NOI.
What is a good cap rate for commercial property in Texas?
It depends on the asset type, location, tenant quality, lease term, and current interest rates — and it moves over time. A credit-tenant NNN building and an older multi-tenant strip center in the same city can trade at very different cap rates. Ask me and I'll send you recent cap rates for your asset type and area.
How is an owner-occupied or vacant building valued?
Buildings without tenants paying rent don't have income to capitalize, so they are usually valued using comparable sales — what similar buildings nearby have sold for, adjusted for size, condition, and location. I can prepare a comparable sales analysis for you.
Is this calculator an appraisal?
No. It's a quick estimate based on the numbers you enter. A Broker Opinion of Value or an appraisal looks at the actual leases, tenant credit, condition, comparable sales, and current market cap rates.
Next step
Want a real number?
I'll review your rent roll, expenses, and recent sales for your asset type and area, and send you a Broker Opinion of Value — at no cost.