What is a good cash-on-cash return for commercial real estate?

A good cash-on-cash return for commercial real estate typically ranges between 8% and 12%, depending on property asset class, geographic market, lease terms, and capital structure.

How do you calculate commercial real estate yield?

Commercial real estate yield is calculated on an unleveraged basis by dividing annual Net Operating Income (NOI) by total property purchase price (Cap Rate), or on a leveraged basis by dividing net annual cash flow by total out-of-pocket invested equity (Cash-on-Cash Return).

Multifamily & Commercial Real Estate Yield Calculator

Free cash-on-cash return calculator with amortization for professional investors.

Underwriting Commercial Real Estate Yield & Investment Performance

Using our institutional-grade commercial real estate yield calculator enables investors, brokers, and underwriters to accurately project property cash flow, capitalization rates, and multi-year returns. Whether analyzing a 100-unit apartment complex using a multifamily yield calculator or evaluating retail and industrial assets with an advanced commercial property ROI calculator, understanding your unleveraged and leveraged return profile is essential before deploying capital.

Formulas for Net Operating Income and Cash-on-Cash Return

Accurate yield underwriting begins by calculating annual net operating income (NOI). Subtract all operating expenses (property taxes, insurance, utilities, maintenance, and management fees) from Effective Gross Income. For leveraged acquisitions, investors determine their annual cash-on-cash return by dividing pre-tax cash flow (NOI minus debt service) by total initial equity invested.

Modeling dynamic mortgage amortization, balloon payoffs, and expense growth rates ensures real estate portfolios maintain resilient debt service coverage and sustainable dividend yields.