Commercial Multifamily Cap Rate NOI 2027 Calculator
Calculate detailed NOI and cap rate for 5+ unit multifamily commercial property. Per-unit metrics, expense ratio, classifies cap rate against 2027 Class A/B/C/D ranges.
| Gross Scheduled Income (GSI) | — |
| Less Vacancy + Bad Debt | — |
| Plus Other Income | — |
| Effective Gross Income (EGI) | — |
| Total Operating Expenses | — |
| Net Operating Income (NOI) | — |
| Expense Ratio (Opex ÷ EGI) | — |
| Cap Rate (NOI ÷ Price) | — |
| Class Benchmark Comparison | — |
Commercial multifamily (5+ units) is priced on cap rate, not comps. NOI = Effective Gross Income minus Operating Expenses (excluding debt service, depreciation, CapEx). Cap rate = NOI / Price. 2027 multifamily cap rates (CBRE Q4 2025): Class A core 4.75-5.50%, Class B 5.50-6.75%, Class C 6.75-8.25%, Class D 8.25-10%+. Source: CBRE Multifamily Cap Rate Survey Q4 2025, Marcus & Millichap.
How Cap Rate Drives Multifamily Pricing
Multifamily (5+ units) trades on cap rate. To estimate value: NOI ÷ market cap rate = price. A property generating $250k NOI in a 6.0% cap market is worth $4.17M. Push NOI up by $50k (raise rents 5%, cut OpEx 3%) → value rises to $5.0M. Cap rate is set by the market, not negotiable. Forced appreciation = NOI growth, not buying lower.
2027 Cap Rate Trends
Cap rates compressed dramatically 2020-22 (4.5% Class A), then expanded as rates rose 2022-24 (5.5-6.0% Class A). 2027 CBRE survey: Class A 4.75-5.50% (institutional Sun Belt urban core), Class B 5.50-6.75% (workforce/secondary), Class C 6.75-8.25%, Class D 8.25%+. Tier 1 markets compressed faster; Tier 2/3 stayed elevated. Going-in cap = property cap at close; exit cap = your assumed cap at sale (usually +50-75 bps for safety).
Expense Ratio Reality Check
Stabilized multifamily expense ratios (OpEx ÷ EGI) typically run 40-55%. Anything below 35% means missing categories — vacancy, payroll, reserves. Anything above 60% means heavy turnover, deferred maintenance, or weak management. Common seller pro forma trick: omit reserves and turnover. Always re-underwrite to T12 actuals + your forward assumptions.
Going-In vs Exit Cap Rate: The Assumption That Breaks Deals
Every multifamily model contains two cap rates, and only one of them is a fact. The going-in cap is observable — it is the NOI you underwrite divided by the price you actually pay. The exit cap is a guess about the market five or ten years out, and it drives more of your projected return than rent growth does.
| Exit cap assumption | Exit value on $300k NOI | vs a 6.00% exit | What it implies |
|---|---|---|---|
| 5.50% (compression) | $5.45M | +$454k | Betting the market re-prices in your favour — aggressive |
| 6.00% (flat) | $5.00M | — | Assumes you sell into the same market you bought in |
| 6.50% (+50 bps) | $4.62M | −$385k | Standard conservative underwrite |
| 7.00% (+100 bps) | $4.29M | −$714k | Stress case — survives a rate-driven repricing |
On a single deal, moving the exit cap by 100 basis points swings value by roughly 14% — often more than every operational improvement in the business plan combined. That is why lenders and institutional LPs generally require an exit cap 50 to 75 basis points above the going-in cap: a sponsor who assumes compression is forecasting the interest-rate environment, not underwriting a property. Run your deal at flat, +50, and +100 before you sign, and treat the +100 case as the one that has to still clear your return hurdle. Because cap rates track the cost of capital closely, sanity-check your assumption against the prevailing Treasury curve published by the U.S. Department of the Treasury — a rising 10-year yield with a falling exit cap in your model is an internal contradiction.
Last updated: August 2026. Sources: CBRE Cap Rate Survey Q4 2025, Marcus & Millichap Research.