Tools · Calculator
Cap Rate & Yield-on-Cost
Stabilised NOI over price (cap rate) and over total cost (yield-on-cost). Enter both to see the development spread — the premium a developer captures over a market buyer.
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Inputs
Result
Cap Rate
6.36%
Yield-on-Cost
7.78%
Development Spread
+141 bps
Yield-on-cost runs +141 bps versus market cap rate. A modest premium for the risk taken. Tight but viable.
Cap rate is what a buyer pays for stabilised income; yield-on-cost is what a developer creates by building it. The gap between the two — the development spread — is the premium for execution risk. Equity investors typically want 100–200+ bps of spread to fund ground-up development.