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Understanding Rental Yield in Commercial Real Estate
Gross yield, net yield, cap rate — the small definitional differences that change how you value an income-producing asset.
Aditya Pradhan · Senior Investment Consultant20 January 20265 min read
Why gross yield can mislead
Gross yield ignores operating costs, vacancy assumptions and re-leasing capex. Net yield brings you closer to the cash that actually reaches your bank account.
Cap rates and exit pricing
Cap rate movements in the local market drive exit pricing far more than rental growth in many investment-grade assets.