Seattle Commercial Real Estate Cap Rate

This discounting factor is used to place a value on the present stream. The selection of the Cap Rate reflects the appraiser’s best judgment as to the quality, quantity and durability of the income stream to be generated by the property in question.

The lower the rate, the more money the seller receives and the more money a buyer will pay. Market Values are most often determined by dividing the Net Operating Income (NOI) by the Cap Rate.


  • For a property with an NOI of $100,000 and a CAP Rate of 7.5%, divide $100,000 by 7.5%.
  • This indicates a Market Value of $1,333,333.
  • NOI ÷ Cap Rate = Market Value

Investors also use Cap Rates to adjust the risk factor. They are also strongly affected by interest rates. The Cap Rate is the yield you would receive if you paid all cash for the property. When interest rates are above 7.5%, you will be paying a higher rate than the “yield”. The property may still cash flow nicely even with this inverted situation, especially if the property is not over leveraged.

Bellevue, not Seattle, tops new list of toughest places to build

The perception is that Seattle is the most challenging place in the Puget Sound region to develop real estate, but new data suggest this is not the case.

Seattle’s most patient developers plan “Missing Middle Housing”

Land in the city is too expensive to build affordable housing. Or is it? They’ve got a plan—and it could mean 1,000 new apartments for the workers who keep Seattle running.

Why Isn’t Inflation Rising Faster?

Consumer prices have been remarkably stable throughout the economic recovery, and they continue to defy expectations. In searching for an explanation, the global commodities markets may provide some clues.


P: 206.324.1900
E: Email Us
D: Driving Directions
Q: Questions

Accredited Management Organization, Certified Property Manager, Institute of Real Estate Management

Foundation Group, Seattle Commercial Real Estate, Affiliations