08/10/2026
Most office deals look great until you run these 4 numbers 👇
Strong office investments come from disciplined analysis, not gut feel. Here's where to start:
NOI (Net Operating Income)
Revenue minus operating expenses. Every other calculation builds on this one.
Cap rate
NOI divided by market value. It's a quick read on potential return. A lower cap rate can make sense in high-demand, growing markets.
Cash-on-cash return
The annual return on the equity you actually put in. Invest $200K, earn $25K a year, and you're at 12.5%.
IRR
Looks at every cash flow over the life of the investment, including the time value of money. It's one of the best ways to compare deals side by side.
But the numbers are only half the story. Before you buy:
Research employment growth and demand for office space
Inspect the building (HVAC, structure, compliance) and take a hard look at the location
Model best, worst, and average-case cash flows
Stress-test your financing structure
Plan for the downside with long-term leases, insurance, and a reserve of about three months' expenses
And know your exit (sell, refinance, or reposition) before you go in.
Which of these 4 do you lean on most?
