I pulled a real deal one of my accelerator members was looking at, changed the names and moved a few figures around, and rebuilt it live. The offering memorandum said 7.25% cap rate. Rebuilt honestly, it's a 4.56% cap rate. And every single number the seller put on that page was accurate.
Is a High Cap Rate Good? Why That 8% Deal Might Be a Trap
Let me show you two deals. A Walgreens at an 8.1% cap rate, and a Chick-fil-A at a 4.45% cap rate. Both triple net. Both corporate tenants. Roughly the same lease.
The instinct is to look at that Walgreens and go, "Well, that's obviously the better deal. Bigger yield, big-name tenant, almost double the return." And that instinct is exactly how investors get burned.
Cap Rate Calculator + 2026 Guide: What's a Good Cap Rate?
How is Commercial Real Estate Valued? Here's the Answer
When determining the value of residential real estate, investors have a pretty easy time.
You simply log into the MLS or check Zillow for comparable properties in the area and utilize the price per square foot to determine the value of the asset you’re reviewing.
Commercial real estate, on the other hand, isn’t quite as simple.