Commercial building value calculator

Three quick tools owners and investors use every day: what your building earns, what it's worth, and how much more it would be worth with the vacancy leased.

Tool 1

NOI and building value

Enter a year of income and expenses. The calculator works out net operating income and the value range at your cap rates.

Estimated value

$1.55M – $1.86M About $78–$93 per SF · NOI $139,600

Gross potential income$240,000

Less vacancy & credit loss–$12,000

Effective gross income$228,000

Less operating expenses–$88,400

Net operating income$139,600

Expenses per SF$4.42

Tool 2

Cap rate calculator

Looking at a building for sale? Enter the asking price and NOI to see the cap rate, or set a target cap rate to see what you should pay.

Cap rate at asking price

7.98% At an 8.5% target, offer about $1,642,000.

Price at your target cap rate$1,642,353

Difference from asking–$107,647

Tool 3

What is leasing my vacancy worth?

Vacant space costs you twice: once in lost rent and again in sale price. See how much value a signed lease would add after leasing costs.

Value added by leasing it

$900,000 Net of $100,000 in leasing costs · about $180 per vacant SF

New annual rent$85,000

Added NOI$85,000

Added building value$1,000,000

Less leasing costs–$100,000

Lease my vacant space

Free · confidential

Want the real number?

Calculators use your inputs. An opinion of value uses SouthCoast comparable sales, your actual leases and what buyers are paying right now. Alexander Carrigg, MBA will put one together for you at no cost.

How we sell buildings

Questions

NOI, cap rate and building value FAQ

How do you calculate NOI?

Net operating income is effective gross income (rent and other income, less vacancy and credit loss) minus operating expenses such as taxes, insurance, utilities, repairs and management. NOI does not include mortgage payments, depreciation or capital improvements.

How do you value a building from NOI?

Divide NOI by the cap rate. A building with $150,000 of NOI at an 8% cap rate is worth about $1,875,000.

What is a cap rate?

The capitalization rate is NOI divided by the price. It is the unlevered yield a buyer earns in the first year. Lower cap rates mean higher prices; buildings with strong tenants and long leases trade at lower cap rates.

How much value does leasing vacant space add?

Each dollar of new NOI adds value equal to that dollar divided by the cap rate. At an 8.5% cap rate, $85,000 of new annual rent on a triple-net basis adds about $1,000,000 of value before leasing costs.

These calculators are for illustration and planning. They are not an appraisal. For a value you can rely on, request an opinion of value or a licensed appraisal.