{"id":772,"date":"2024-05-01T00:00:00","date_gmt":"2024-05-01T07:00:00","guid":{"rendered":"https:\/\/crecalculator.com\/faqs\/?p=772"},"modified":"2024-05-01T00:00:00","modified_gmt":"2024-05-01T07:00:00","slug":"cre-terms-to-know-capitalization-rate-or-cap-rate","status":"publish","type":"post","link":"https:\/\/crecalculator.com\/faqs\/cre-terms-to-know-capitalization-rate-or-cap-rate\/","title":{"rendered":"CRE Terms to Know: Capitalization Rate or Cap Rate"},"content":{"rendered":"<p>Unlevered initial return from the acquisition of a real estate asset calculated by dividing net operating income (NOI) by the property sales price. For example, a property\u2019s capitalization rate (cap rate) is 10 percent if it is purchased for $10 million and produces $1 million in NOI during one year. The cap rate is typically calculated using the NOI generated in the first year of ownership so investors can normalize and compare potential returns among competing investment properties.<\/p>\n<p>Learn more at <a href=\"https:\/\/www.naiop.org\/education-and-career\/industry-terms-and-definitions\" target=\"_blank\" rel=\"noopener\">https:\/\/www.naiop.org<\/a><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/source.unsplash.com\/featured\/?commercial-real-estate\" alt=\"Commercial Real Estate\" width=\"800\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlevered initial return from the acquisition of a real estate asset calculated by dividing net operating income (NOI) by the property sales price. For example, a property\u2019s capitalization rate (cap rate) is 10 percent if it is purchased for $10 million and produces $1 million in NOI during one year. The cap rate is typically &#8230; <a title=\"CRE Terms to Know: Capitalization Rate or Cap Rate\" class=\"read-more\" href=\"https:\/\/crecalculator.com\/faqs\/cre-terms-to-know-capitalization-rate-or-cap-rate\/\" aria-label=\"Read more about CRE Terms to Know: Capitalization Rate or Cap Rate\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-772","post","type-post","status-publish","format-standard","hentry","category-commercial-real-estate-definitions","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-50"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CRE Terms to Know: Capitalization Rate or Cap Rate - Commercial Real Estate Valuation Calculator FAQs<\/title>\n<meta name=\"description\" content=\"Commercial Real Estate Valuation Calculator FAQs - 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