NOI Calculator
Calculate net operating income from gross rental income, vacancy, and operating expenses. The foundation of every commercial property valuation.
Enter gross rental income to calculate NOI.
Use this NOI in the cap rate calculator or DSCR calculator. Station CRM tracks the market intelligence behind the numbers. See the platform →
What is net operating income (NOI)?
Net operating income is the money a property generates after paying operating costs but before accounting for debt service or taxes. You start with gross rental income, subtract a vacancy allowance, then subtract operating expenses, property taxes, insurance, maintenance, management fees. What's left is NOI. It's the core metric for valuing commercial real estate: divide it by the cap rate and you have implied property value. It's also what lenders use to calculate DSCR. NOI is intentionally financing-agnostic, it measures the property's performance independent of how you own it or how it's leveraged. Station CRM surfaces NOI trends for NYC retail properties as part of its market intelligence data, helping brokers underwrite deals before a full rent roll is available.
NOI does not include mortgage principal or interest, depreciation, income taxes, or capital expenditures. Those are ownership-structure decisions, not property economics. By stripping them out, NOI lets you compare a property that's owned free and clear against one with heavy debt, on the same terms.
What goes into operating expenses?
Operating expenses are the recurring costs of running the property. In a standard gross lease, the landlord pays most of these. In a NNN lease, the tenant covers some or all of them directly. For NOI purposes, include what the landlord actually pays net of tenant reimbursements.
Property taxes, often the largest single expense in NYC. Can be $15 to 40/SF annually depending on assessed value and abatements.
Insurance, building and liability coverage. Typically $1 to 3/SF for retail.
Maintenance and repairs, routine upkeep, HVAC service, plumbing, electrical. Budget 3 to 5% of gross rent for older buildings.
Property management, 4 to 8% of effective gross income if using a third-party manager.
Common area utilities and cleaning, relevant for multi-tenant buildings with shared spaces.
NOI in a deal context
Say you're representing a buyer on a 4,000 SF retail building in Crown Heights. The tenant pays $22,000/month gross. You underwrite 5% vacancy and $55,000 in annual operating expenses. That gives you an NOI of roughly $205,000.
Plug that into the cap rate calculator at 5.75%, the current market range for that corridor, and the implied value is $3.57M. If the seller wants $4.2M, they're asking for a 4.9% cap. Your buyer would be accepting sub-market yield unless the rent is below market and there's a clear upside path.
That's the conversation NOI enables. Without it, you're negotiating off the asking price rather than the underlying economics.