Capitalization Rate

The Capitalization Rate (Cap Rate) is a fundamental metric in commercial real estate used to estimate the potential return on an investment property based on its income.

What is Capitalization Rate?

Cap Rate is calculated by dividing the property's net operating income (NOI) by its current market value or purchase price.

Common Features of Private Lending Software

Workflow Automation

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Ecosystem Integrations

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Cap Rate Formula

Using net operating income to assess investment returns.
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Why Cap Rate Matters

It provides a quick and standard way to compare the profitability and risk of different real estate investments.

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Secured Loan

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Underwriting

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Interest-Only Loan

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Return on Investment

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Term Sheet

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Capitalization Rate

Accelerate your loan lifecycle. Learn how no-code automation can eliminate manual tasks and speed up your time-to-close.