Commercial Real Estate Cap Rate & NOI Optimizer.

## Commercial Real Estate Valuation Guide

Capitalization rate (Cap Rate) and Net Operating Income (NOI) are the two fundamental metrics for valuing commercial real estate. By accurately modeling your operating expenses and projecting realistic asking rents, you can use our optimizer to calculate the exact threshold at which a property becomes a viable investment vehicle for your specific yield requirements.

### FAQ

**Q: How is NOI calculated?**
A: Net Operating Income is calculated by subtracting all operating expenses from the Effective Gross Income (Gross Rent minus Vacancy assumptions). It does not include mortgage debt service or capital expenditures.

**Q: What is a good Operating Expense Ratio (OER)?**
A: A typical OER ranges from 35% to 45%, but this varies wildly depending on the asset class (e.g., Triple Net Lease vs Full Service Gross office buildings).