Calculate cap rates and net operating income for commercial properties in California. Compare your results against California's gateway market benchmarks sourced from CBRE H2 2025.
California contains multiple gateway markets. LA multifamily averages 4.3–4.7% (CBRE 2025). Inland Empire industrial at ~5.6% (CBRE Q4 2025). San Francisco office has been significantly repriced post-pandemic. High barriers to entry, rent control regulations, and strong long-term appreciation potential justify compressed cap rates. Rent control laws (AB 1482) apply statewide.
| Property Type | Typical Low % | Typical High % |
|---|---|---|
| Multifamily | 4.0% | 5.5% |
| Industrial | 4.5% | 6.0% |
| Retail | 5.0% | 7.0% |
| Office | 6.0% | 9.0% |
Benchmarks sourced from CBRE H2 2025 Cap Rate Survey, JP Morgan, Matthews, and Cushman & Wakefield market data. Ranges represent typical stabilized assets — actual rates vary by asset quality, location, and market conditions.
California cap rates are among the lowest nationally due to its gateway market status. Multifamily ranges from 4.0–5.5%, industrial from 4.5–6.0% (Inland Empire ~5.6% per CBRE 2025), retail from 5.0–7.0%, and office from 6.0–9.0% depending on location and class. San Francisco office has seen widening due to remote work.
California's AB 1482 (effective 2020) caps annual rent increases at 5% plus local CPI for most multifamily buildings over 15 years old. This limits NOI growth potential, which is factored into cap rate pricing. Investors analyze rent-controlled vs. exempt buildings differently, with exempt properties commanding tighter caps due to stronger upside.
California office recovery is uneven. San Diego life sciences (~6.0%) and suburban Orange County (~6.7%) are more stable. Downtown LA towers face the most pressure with cap rates widened to 6.4%+ (Cushman & Wakefield). Return-to-office mandates at major tech firms are helping demand, but hybrid work continues to reshape space requirements.
This tool is for informational and educational reference only and does not constitute real estate investment advice. Cap rate benchmarks are estimates based on published industry surveys and may not reflect current conditions in your specific market, submarket, or asset class. Actual cap rates vary significantly based on property condition, location, tenant quality, lease terms, and local market dynamics. Always consult a licensed commercial real estate broker, appraiser, or investment advisor before making real estate investment decisions.