Finance category
Mortgage, loan, investing, tax, and money calculators.
Yield Shift Calculator
A modest cap rate move has a big price impact. This calculator quantifies the value change from a specific yield shift.
Value change
-$769,231
Value before
$10,000,000
Value after
$9,230,769
How the math works
Value change = (NOI / new cap) − (NOI / old cap). Lower caps lift value, higher caps crush it.
Stress-test every deal for a 100bps cap expansion. A 6% cap going to 7% drops value ~14%; that can wipe out equity on highly levered deals. Build reversion cushion into pricing.
How to Use
- Enter NOI.
- Enter starting cap rate.
- Enter cap rate shift (bps, + expands).
- Read value before/after and delta.
Frequently Asked Questions
Why so sensitive?
Value = NOI ÷ cap. Small cap changes swing value a lot because it's a division. A 50bps expansion on a 6% cap = 8.3% value drop even with unchanged NOI.
When do caps shift?
Rate cycles (10Y rises → caps rise). Credit spreads widening. Investor sentiment. Asset-class specific — office caps can shift independently of multifamily.
How to hedge?
Lock rate with interest-rate cap (financial). Increase NOI to offset cap expansion. Exit early before cap compression ends. Build reversion gain into underwriting.
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