The general concept of a Cap Rate or Capitalization Rate is a method of determining the value of an asset applying a market Cap Rate to the Net Operating Income (NOI). (NOI/Cap Rate = Value) Cap Rates move up and down depending on several factors such as the credit of the tenant, term left on the lease, market conditions and quality of the real estate among other factors. It’s important to note this is only one metric used when evaluating commercial real estate. We have more answers if you have more questions.