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Reversion Value Calculator

Reversion (or terminal) value is the estimated sale price at the end of the hold period. It usually drives 60-80% of IRR in a DCF, so small assumptions make big impact. This calculator computes reversion from exit-year NOI and terminal cap rate.

Reviewed byJulian Germanfor EveryCalcMethodology

Year-1 NOI

Annual NOI growth

Hold years

Terminal cap rate

Selling costs

Net reversion proceeds

$4,680,685

Exit-year NOI

$298,513

Gross reversion value

$4,776,209

Selling costs

$95,524

How the math works

Reversion = exit NOI ÷ terminal cap rate, minus selling costs. In a 7-year hold with 3% NOI growth and entry NOI of $250k, exit NOI is ~$299k. At a 6.25% exit cap, reversion ≈ $4.79M before selling costs.

Reversion sensitivity: a 25bps cap move changes reversion by ~4% on a 6% cap; on a 4% cap, it's ~6%. That's why institutional LPs cap-weight projections and stress-test.

Editorial noteReviewed by Julian German - Updated July 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Reversion Value Calculator is built to give a quick, browser-based estimate for reversion value. Reversion (or terminal) value is the estimated sale price at the end of the hold period. It usually drives 60-80% of IRR in a DCF, so small assumptions make big impact. This calculator computes reversion from exit-year NOI and terminal cap rate. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the reversion value result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this reversion value estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter year-1 NOI.
Enter annual NOI growth rate.
Enter exit year (hold period).
Enter terminal cap rate.
Enter selling costs (as % of reversion).
Read gross and net reversion value.

Frequently Asked Questions

How to pick terminal cap rate?

Typical practice: entry cap + 25-75bps to account for the building being older at sale. In falling-rate markets, underwriters sometimes hold flat. For institutional exits, align with comps for the asset class in year-N projected.

What selling costs apply?

Brokerage (1-3% for institutional, 4-6% for smaller deals), legal, title, transfer tax, prepayment penalty on existing debt, and possibly defeasance. Total commonly 2-5% for institutional, 6-8% for mid-market.

What if reversion NOI drops?

Sensitize. A 10% miss on exit NOI combined with 50bps cap expansion can wipe out 30-40% of projected reversion. Always stress-test — that's why bridge-to-permanent deals blow up.

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