Alberta Real Estate Licensing Exam Practice · Question
A commercial property in Calgary is listed for $3,500,000. It generates an annual Net Operating Income (NOI) of $280,000. What is the capitalization rate (cap rate) for this property?
The capitalization rate is calculated by dividing the Net Operating Income (NOI) by the property's market value. In this case, $280,000 / $3,500,000 = 0.08 or 8
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Question: A commercial property in Calgary is listed for $3,500,000. It generates an annual Net Operating Income (NOI) of $280,000. What is the capitalization rate (cap rate) for this property?
Answer options:
- 7.5% ✅ 8.0%
- 8.5%
- 9.0%
Correct answer: 8.0%
Explanation: The capitalization rate is calculated by dividing the Net Operating Income (NOI) by the property's market value. In this case, $280,000 / $3,500,000 = 0.08 or 8.0%.
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