Vacancy Drag On Cap Rate Calculator

Vacancy widens cap rate. This calculator adjusts.

Market cap rate %

Property vacancy %

Market vacancy %

NOI

Effective cap rate %

10.50%

Value impact (negative = drag)

-$8,791,209

Vacancy premium bps

400

How the math works

Vacancy premium = (prop vac − market vac) × 4000 bps. Effective cap = market + premium.

15% vacancy vs 5% market = 10 pts gap × 40 bps = 400 bps premium. 6.5% base + 4% = 10.5% effective. $1.5M NOI / 10.5% = $14.3M vs $23.1M at market cap. $8.8M value drag from vacancy.

How to Use

Enter market cap rate %.
Enter property vacancy %.
Enter market vacancy %.
Enter NOI.
Read effective cap and value impact.

Frequently Asked Questions

How does vacancy affect cap?

Buyers discount vacant properties (higher risk, higher cost to stabilize). Cap rate 50-150 bps wider for material vacancy. Very full buildings: tighter cap. Each 5% above market vacancy: ~25-50 bps cap expansion typical.

Stabilized vs current?

Current cap: based on current NOI (depressed if vacant). Stabilized cap: based on pro-forma stabilized NOI (market occupancy). Savvy sellers market on stabilized; buyers underwrite on current. Gap = lease-up risk discount.

Buyer math?

Discount future NOI uplift from stabilization. E.g., 85% occupied now, 95% stabilized in 12 months: buyer pays for 85% today + discounts 10% lift over 12 months at appropriate rate. Translates to wider apparent cap rate on current NOI.