Cap Rate & Property Value Calculator
Value = NOI ÷ cap rate
Enter your numbers for the value and price per key.
TL;DR Property value = NOI ÷ cap rate A hotel producing $850,000 of net operating income at an 8.5% cap rate is worth $10,000,000, or $100,000 per key on 100 rooms. Hotel cap rates typically run 7% to 9.5% as of Q3 2026.
Property value
$10,000,000
Price per key
$100,000
The formula
Value = NOI ÷ (cap rate ÷ 100) · Price per key = Value ÷ rooms
Worked example
A 100-room select-service hotel earns $850,000 of NOI. At a market cap rate of 8.5%: value = $850,000 ÷ 0.085 = $10,000,000, and price per key = $10,000,000 ÷ 100 = $100,000 per key. If the same hotel were priced at $11,300,000, the implied cap rate would be $850,000 ÷ $11,300,000 = 7.5%.
Typical hotel cap rates (indicative, as of Q3 2026)
| Asset type | Typical cap rate | Typical price per key |
|---|---|---|
| Economy / midscale select-service | 8.5% – 10% | $60K – $110K |
| Upper-midscale select-service | 7.5% – 9.5% | $100K – $180K |
| Upscale select-service | 7% – 9% | $150K – $280K |
| Full-service / upper-upscale | 7% – 9% | $200K – $450K |
Ranges are indicative national figures for stabilized assets and vary by market, brand, and condition. For preliminary planning only; not an offer of credit.
Frequently asked questions
How do you calculate property value from NOI and cap rate?
Value = net operating income ÷ cap rate. A property producing $850,000 of NOI at an 8.5% cap rate is worth $850,000 ÷ 0.085 = $10,000,000. Divide by the room count for price per key: $100,000 per key on a 100-room hotel.
What is a typical cap rate for a hotel?
As of Q3 2026, select-service hotels generally trade around 7.5% to 9.5% cap rates and full-service hotels around 7% to 9%, with premium markets and newer assets at the low end. Cap rates move with interest rates and market risk, so always check current comparable sales.
What is price per key?
Price per key is the property value divided by the number of rooms (keys). It is the standard unit of comparison for hotel sales: a $10,000,000 valuation on a 100-room hotel is $100,000 per key.
What is the difference between cap rate and yield on cost?
Cap rate values an existing income stream (NOI ÷ price). Yield on cost measures a development or renovation: stabilized NOI ÷ total project cost. Developers target a yield on cost comfortably above market cap rates to justify the build.