A plain-language explanation of cap rate and how to use it when evaluating a commercial property.
What This Article Covers
This SellBusiness resource focuses on cap rate explained . The source content brief identifies the following key areas for this article.
Formula
Example calculation
What a "good" cap rate looks like
Limitations of cap rate
Commercial Real Estate
Commercial property buyers and investors.
Related Topics
This information is general in nature. Business purchases, sales, financing, tax, legal and commercial real estate matters can vary by transaction. Professional advice should be obtained where appropriate.