Short answer: your net-lease property is worth its annual income divided by a cap rate. Everything else is figuring out the right income and the right cap rate.

Here's how it actually works, and how to get a real number for your property.

The math

Commercial net-lease property is priced on a cap rate — the annual return a buyer expects on the price they pay. The formula:

Value = Annual Net Operating Income ÷ Cap Rate

Say your property nets $100,000 a year in rent and similar properties are trading at a 6.5% cap rate:

$100,000 ÷ 0.065 = about $1.54 million.

That's it. The whole game is the two numbers you plug in.

One thing that trips people up: a lower cap rate means a higher price. A property that sells at a 5.5% cap is worth more than the same income at a 7% cap. Lower cap rate = buyers accept a smaller return because they see the income as safer. So when you're trying to raise your value, you're trying to push the cap rate down.

What moves your cap rate

Three things do most of the work, and they're all about how safe the income looks:

  • The tenant's credit. Rent from a national, investment-grade company (a major pharmacy, a national dollar-store chain) is about as dependable as income gets, so buyers price it at a low cap rate. Rent from a local operator carries more risk, so the cap rate is higher and the value lower — same building, different income quality.
  • Years left on the lease. More term, more certainty. Twelve years remaining prices far tighter than three. As a lease winds down, buyers start pricing in the risk that the tenant leaves — and the cap rate climbs.
  • The rent and its bumps. What the tenant pays now, and whether the rent steps up over time. Built-in increases make the income grow, which buyers pay up for.

Then the smaller levers: location, how the lease splits responsibilities (an absolute-NNN lease where the tenant covers everything is worth more than one that leaves you on the hook for the roof), the building, the market, and where interest rates sit that month.

Why the online estimate is wrong

If you've tried to look up your property's value the way you'd check a house on Zillow — stop. That number is meaningless for commercial real estate.

A house is valued off comparable home sales nearby. A net-lease property is valued off its lease. Two identical-looking buildings on the same street can be worth a million dollars apart because one has a strong tenant with twelve years left and the other has a weak one with two. No automated home-value tool knows or cares about any of that.

The real comps are recent sales of similar leases — same kind of tenant, similar term, similar market — and those trade in a world (broker closings, net-lease marketplaces, deal databases) that a consumer website doesn't touch.

How to get a real number

Three ways, roughly in order of effort:

  1. Do the math yourself. Pull your current annual net rent, find the cap rate that comparable tenants are trading at today, and divide. The hard part is that second number — cap rates move with rates and vary a lot by tenant, so last year's figure can be well off. (Want to see the math play out? Try our value estimator — plug in your rent and a cap rate and watch the number move.)
  2. Pay for a commercial appraisal. Thorough, and useful when you need a defensible number for an estate, a partnership split, or a lender. It costs money and takes time.
  3. Ask a buyer who prices these every day. The fastest read on what your property is actually worth is what someone will actually pay for it — today, in this rate environment, for your specific tenant and term.

We'll give you a straight number

That last option is us. We buy single-tenant net-lease property directly, which means we're pricing these deals constantly and we know where real cap rates are right now — not last year, and not in theory.

Send us the basics — tenant, location, current rent, and years left on the lease — and we'll tell you what it's worth to us, usually within a few days. No cost, no obligation, and no lowball that assumes you haven't read this page. If it's worth more on the open market than to a direct buyer, we'll tell you that too. Get a number on your property.