Market Rent Recapture Calculator

Below-market rents are NOI upside on rollover. This calculator sizes the recapture.

In-place rent

Market rent

Rollover units/yr

Years to M2M

Total annual recapture

$432,000

Gap per unit

$3,600

Year 1 recapture

$86,400

How the math works

Recapture per unit = (market − in-place) × 12. Annual capture ≈ rollover units × gap; year 1 ≈ 50% (mid-year).

Model recapture net of retention-driven renewal concessions (usually 30-50% of street rent gap on in-place renewals). Gross recapture inflated by 20-40% is a common pitfall in broker OMs — discount accordingly in underwriting.

How to Use

Enter current in-place rent per unit/month.
Enter market rent.
Enter rollover units per year.
Enter years to full mark-to-market.
Read annual and total recapture.

Frequently Asked Questions

How fast to recapture?

MF: 12-24 months to fully mark-to-market assuming typical 40-60% annual turn. Commercial office/retail: 5-10 years matching lease rollover. Each asset class pushes different pace.

Barriers?

Rent control (caps annual increase), long-dated leases (commercial), tenant relationships (retention discount), below-market renewal options (deadly). Audit the rent roll before pricing an asset — stated market rent gap shrinks fast against these.

Accelerators?

Unit turn allows full reset (no renewal constraint). Renovations trigger new lease with higher base. Non-renewal incentives for below-market holdouts. LOI negotiation on commercial when rollover hits.

What documentation matters here?

Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.