Understanding the Numbers
DealGapIQ evaluates every property against 8 key investment metrics. These national benchmarks help you understand how a deal compares to market standards and what ranges indicate strong, average, or weak performance.
Data reflects Q4 2025 - Q1 2026 from institutional research (CBRE, Freddie Mac) across 50+ metropolitan markets.
The capitalization rate measures the ratio of net operating income to property value. It serves as the foundational metric for comparing investment returns across properties independent of financing structure.
Formula
Cap Rate = Net Operating Income (NOI) / Property Value × 100
National Benchmarks
What the Numbers Mean
A "good" cap rate cannot be evaluated in isolation. A 6% cap rate in a high-growth Sun Belt market differs fundamentally from a 6% cap rate in a declining market. Evaluate cap rates against local vacancy trends, rent growth trajectories, and economic fundamentals.
Key Takeaways
No single metric tells the complete story. Sophisticated investors triangulate across multiple dimensions to assess risk-adjusted return potential.
Properties must perform across multiple metrics. A property with an attractive 7% cap rate but 0.95x DSCR is unfinanceable.
Context matters. A 6% cap rate in a high-growth Sun Belt market differs fundamentally from a 6% cap rate in a declining market.
Target Ranges by Investor Profile
Data sources: CBRE, Freddie Mac, Fannie Mae, industry research
Updated Q1 2026 • DealGapIQ