The most important metric in valuing a CRE property is the net operating income (NOI). It is used as the basis for CRE valuation whether it is an acquisition, sale, or appraisal. A property's NOI is calculated as follows:
| Gross Potential Rent (annual rent for all signed leases plus vacant space at the market rent) |
| Plus: Other income (tenant reimbursements, parking, percentage rent, etc.) |
| Less: Vacancy (as a percent of the gross potential rent) |
| Equals: Effective Gross Income |
| Less: Operating Expenses (excluding tenant improvements, leasing commissions, capital improvements and debt payments) |
| Equals: Net Operating Income |
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