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Real Estate Sensitivity (Cap Rate Change) Calculator

Estimate value change given basis‑point moves in capitalization rates.

Real Estate Sensitivity (Cap Rate Change) Calculator

Estimate value impact when cap rates move by selected basis points.

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Property Appreciation

Future value projection.

Guide

Best practices for modeling cap‑rate moves

  • Pair cap‑rate scenarios with NOI growth assumptions to see combined effects.
  • Use basis‑point steps (25–100 bps) that reflect current market volatility.
  • Stress test financing: higher rates can reduce NOI via interest expense.

Frequently Asked Questions

SEO‑friendly answers on cap rate and valuation

What is a cap rate?

Capitalization rate equals NOI divided by market value. It is a shorthand for pricing income‑producing property.

Why do small cap‑rate moves change value so much?

Value is inversely related to cap rate. A 50 bps change can swing value by 8–10% around common ranges.

Are cap rates the same across property types?

No—multifamily, office, retail, and industrial each have distinct cap‑rate ranges based on risk and growth expectations.

How do interest rates affect cap rates?

Higher funding costs generally pressure cap rates higher (values lower), but supply/demand and rent growth also matter.

Does NOI growth offset cap‑rate expansion?

Yes—rising NOI can partly offset valuation pressure from higher cap rates. Model both drivers together.

Are cap rates pre‑tax?

Yes—cap rates use NOI before financing and taxes to compare properties consistently.

What is a basis point (bps)?

One basis point is 0.01%. A 50 bps move equals 0.50 percentage points.

Which cap rate should I use?

Use current market comps for similar assets, location, lease terms, and risk profile.

How do renovations impact cap rate?

Stabilized NOI and perceived risk change with renovations; markets may accept lower cap rates for higher‑quality, durable income.

Is terminal cap rate different?

Yes—pro formas often assume a different exit (terminal) cap rate to reflect future market uncertainty.

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Real Estate Sensitivity (Cap Rate Change) Calculator

Estimate value change given basis‑point moves in capitalization rates.

How to use Real Estate Sensitivity (Cap Rate Change) Calculator

Step-by-step guide to using the Real Estate Sensitivity (Cap Rate Change) Calculator:

  1. Enter your values. Input the required values in the calculator form
  2. Calculate. The calculator will automatically compute and display your results
  3. Review results. Review the calculated results and any additional information provided

Frequently asked questions

How do I use the Real Estate Sensitivity (Cap Rate Change) Calculator?

Simply enter your values in the input fields and the calculator will automatically compute the results. The Real Estate Sensitivity (Cap Rate Change) Calculator is designed to be user-friendly and provide instant calculations.

Is the Real Estate Sensitivity (Cap Rate Change) Calculator free to use?

Yes, the Real Estate Sensitivity (Cap Rate Change) Calculator is completely free to use. No registration or payment is required.

Can I use this calculator on mobile devices?

Yes, the Real Estate Sensitivity (Cap Rate Change) Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.

Are the results from Real Estate Sensitivity (Cap Rate Change) Calculator accurate?

Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.