Inputs
Revenue minus operating expenses, before interest, taxes, depreciation, and amortization.
Enter as percent, e.g., 7.5 for 7.5%. Smart-parses decimals.
Use 2025–2026 benchmark (optional)
Result
Implied Property Value
$6,666,667
Sensitivity: ±50 bps cap rate move
A 50 basis point shift in cap rate can create material equity gaps on SBA 504 deals where LTV applies to the lower of cost or appraised value.
| Cap rate | Implied value | Δ vs base |
|---|---|---|
| 7.00% | $7,142,857 | +$476,190 |
| 7.10% | $7,042,254 | +$375,587 |
| 7.20% | $6,944,444 | +$277,778 |
| 7.30% | $6,849,315 | +$182,648 |
| 7.40% | $6,756,757 | +$90,090 |
| 7.50% (base) | $6,666,667 | $0 |
| 7.60% | $6,578,947 | -$87,719 |
| 7.70% | $6,493,506 | -$173,160 |
| 7.80% | $6,410,256 | -$256,410 |
| 7.90% | $6,329,114 | -$337,553 |
| 8.00% | $6,250,000 | -$416,667 |
All 2025–2026 cap rate benchmarks
Going-in stabilized cap rate ranges by asset class, subtype, and MSA tier. Always verify against current broker surveys and USPAP-compliant appraisals for any lending decision.
| Asset / subtype | Primary | Secondary | Tertiary | Source |
|---|---|---|---|---|
| Multifamily — Class A stabilized | 4.25%–4.75% | 4.75%–5.50% | 5.50%–6.25% | CBRE H2 2025 / Arbor Q4 2025 / Matthews 2025 |
| Multifamily — Class B | 5.00%–5.75% | 5.50%–6.50% | 6.50%–7.50% | Matthews 2025 |
| Multifamily — Class C | 6.00%–7.00% | 6.50%–7.75% | 7.50%–9.00% | Matthews 2025 / CBRE H2 2025 |
| Industrial — Warehouse Class A | 4.75%–5.50% | 5.25%–6.00% | 6.00%–7.00% | C&W Fall 2025 (avg 6.29%) |
| Industrial — Flex | 6.00%–7.00% | 6.50%–7.50% | 7.25%–8.50% | Matthews 2025 |
| Industrial — Manufacturing | 6.75%–7.75% | 7.00%–8.25% | 7.50%–9.50% | B+E Q3 2025 (avg 7.58%) |
| Office — CBD Class A trophy | 6.50%–7.75% | 7.25%–8.50% | 8.00%–9.50% | CBRE H2 2025 |
| Office — CBD Class B/C | 8.50%–11.00% | 9.50%–12.50% | 10.00%–14.00% | CBRE H2 2025 (distress conditions) |
| Office — Suburban Class A | 7.50%–9.00% | 8.00%–9.50% | 8.75%–10.50% | CBRE H1 2025 |
| Retail — Grocery-anchored center | 5.75%–6.50% | 6.25%–7.00% | 7.00%–8.00% | CBRE H2 2025 / Matthews 2025 |
| Retail — Power center | 6.75%–7.75% | 7.25%–8.25% | 7.75%–9.00% | IRR Mid-Year 2025 |
| Retail — Strip / unanchored | 7.00%–8.00% | 7.50%–8.75% | 8.00%–10.00% | IRR Mid-Year 2025 |
| STNL — Investment-grade tenant | 5.25%–6.00% | 5.50%–6.25% | 5.75%–6.75% | Boulder Group Q3 2025 |
| STNL — Sub-IG / franchisee | 6.50%–7.50% | 7.00%–8.00% | 7.50%–9.50% | Matthews 2025 |
| Hotel — Full-service / luxury | 6.75%–8.00% | 7.50%–8.75% | 8.25%–9.50% | RERC Q3 2024 / industry composite |
| Hotel — Select-service | 7.75%–9.00% | 8.25%–9.75% | 9.00%–10.50% | HVS 2025 / industry composite |
| Hotel — Limited-service / economy | 9.00%–10.50% | 9.50%–11.00% | 10.00%–12.00% | Industry composite 2025 |
| Self-Storage — Class A stabilized | 5.00%–5.50% | 5.25%–5.75% | 5.75%–6.50% | C&W H1 2025 (avg 5.8%) |
| Self-Storage — Class B | 5.50%–6.50% | 6.00%–7.00% | 6.75%–7.75% | C&W H1 2025 |
| Medical Office — On-campus | 5.50%–6.25% | 5.75%–6.75% | 6.25%–7.25% | PwC/Revista 2Q25 (portfolio 6.5%) |
| Medical Office — Off-campus | 6.25%–7.25% | 6.75%–7.75% | 7.25%–8.50% | Revista 2Q25 (~30 bps wider than on-campus) |
| Senior — Active Adult Class A | 5.25%–5.75% | 5.75%–6.25% | 6.25%–7.00% | CBRE Senior Housing H2 2025 |
| Senior — Independent Living Class A | 5.85%–6.35% | 6.25%–6.75% | 6.75%–7.75% | CBRE H2 2025 |
| Senior — Assisted Living | 6.75%–7.50% | 7.25%–8.00% | 7.75%–9.00% | CBRE H2 2025 (down 19 bps YoY) |
| Senior — Memory Care | 7.50%–8.25% | 8.00%–8.75% | 8.50%–9.75% | CBRE H2 2025 |
| Senior — Skilled Nursing | 11.50%–13.00% | 12.00%–13.50% | 12.75%–15.00% | CBRE H2 2025 |
MSA tier definitions: Primary = gateway markets (NYC, SF, LA, CHI, DC, BOS, SEA, MIA). Secondary = major Sunbelt / regional (DFW, HOU, ATL, PHX, NAS, CHR, TPA, DEN, RAL). Tertiary = smaller metros and non-MSA.
Macro context (CBRE H2 2025 Cap Rate Survey, Feb 2026): All-property cap rate held steady; ~half of retail, industrial, hotel respondents expect compression over next 6 months; 10-yr UST around 4.0–4.2%; transaction volume +19% YoY in 2025.
Frequently Asked Questions
What is the cap rate formula?+
The capitalization rate equals annual Net Operating Income divided by property value, expressed as a percentage. Cap Rate = NOI ÷ Value. Rearranged: Value = NOI ÷ Cap Rate, and NOI = Value × Cap Rate.
What is a good cap rate in 2026?+
What qualifies as a good cap rate depends entirely on asset class, MSA tier, property quality, and the buyer's yield requirements. In 2025–2026, national averages include: multifamily ~5.0–5.5%, Class A industrial 5.0–6.0%, CBD Class A office 7.0–8.5%, grocery-anchored retail 6.0–7.0%, select-service hotels 8.0–9.5%, and self-storage 5.5–6.5%.
How does cap rate affect SBA 504 financing?+
SBA 504 applies LTV to the lower of appraised value or total project cost. A 50 basis point move in the cap rate can create a 7–10% equity gap if the project cost exceeds the appraised value. SBA 504 requires a USPAP-compliant appraisal for projects $500,000 and above.
What is the difference between going-in and exit cap rates?+
Going-in cap rate is calculated on year-one NOI at acquisition. Exit cap rate is the assumed cap rate at disposition for DCF or underwriting purposes, typically 25–75 basis points higher than going-in.
Is the cap rate a substitute for a full appraisal?+
No. This calculator provides a quick directional value based on direct capitalization but does not replace a USPAP-compliant appraisal performed by a state-licensed or state-certified appraiser.
Why does the calculator allow both 7 and 0.07 for cap rate?+
The input is smart-parsed. Values greater than 1 are treated as a percentage. Values between 0 and 1 are treated as a decimal.
NOT AN APPRAISAL. This calculator provides a directional value estimate using direct capitalization. It does not replace a USPAP-compliant appraisal. SBA 504 and SBA 7(a) loans require a USPAP-compliant appraisal performed by a state-licensed or state-certified appraiser per SOP 50 10 8 for projects $500,000 and above, all change-of-ownership transactions, and all non-arm's-length transactions.
Benchmark ranges are point-in-time estimates. Cap rates shift with interest rates, capital flows, and asset-specific performance. Published ranges reflect the cited source and as-of date and may not reflect current market conditions.
Not affiliated with SBA. sba-feasibility-study.com is an independent resource and is not affiliated with, endorsed by, or sponsored by the U.S. Small Business Administration or any government agency.
SBA 504 Deal? You'll Need an Appraisal and a Feasibility Study.
SBA 504 projects $500,000 and above require a USPAP-compliant appraisal. Many also require an SBA-compliant feasibility study — startup, new construction, change of use, and special-purpose property. Institutional-quality reports from $4,900 with a 50/50 fee structure.
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