NNN Cap Rate Calculator
Model net operating income, cap rate, and cash-on-cash return on triple-net lease properties. Stress-test leverage before evaluating a DST.
This model excludes sponsor acquisition, asset management, and disposition fees, which typically reduce distributed yield by 100 to 300 basis points over a hold. A full DST offering memorandum will disclose those.
Cap rate
NOI divided by price. An unlevered measure of property yield, useful for comparing real estate regardless of how the deal is financed. NNN cap rates vary meaningfully with tenant credit and asset type.
Cash-on-cash
Pre-tax cash flow divided by the cash invested. This is closer to what an investor actually collects once debt service, reserves, and sponsor fees are accounted for. Often cited as “Year 1 distribution” on a DST offering.
Positive vs. negative leverage
When the cap rate exceeds the borrowing cost, leverage lifts cash-on-cash above the cap rate. When the borrowing cost exceeds the cap rate, leverage drags it below. Post-2022 rate environments have compressed this spread meaningfully.
Bring the offering memorandum
We'll stress-test the underwriting against current market comparables and walk through the assumptions worth questioning.