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What is CAP Rate, Pro Forma CAP Rate, and CAP Rate. In the example I provided above, the CAP rate was 6% (or income of $60,000). Let’s say the building was in a low CAP rate environment, like Toronto, San Francisco, or New York (which also has low CAP rates) and the CAP rate was 2% (yes, there are many buildings with CAP rates that are low), leaving the building with a profit of 2%. The PRO.

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Pro Forma Cap Rate: an Essential Metric for. - Biproxi Pro forma cap rate is a tool for evaluating the return on investment of a property. To calculate a pro forma cap rate, divide yearly net operating income (NOI) by the total acquisition cost (purchase price plus repair expense). NOI / [total acquisition cost (purchase rehab)] = pro forma cap rate. Pro forma cap rate is a useful tool for.

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