Going-In Cap Rate

Distinguishing Going-In, Stabilized, Exit, and Going-Out Cap

• Going-in cap: T-12 or year-one NOI ÷ purchase price — entry yield at acquisition
• Stabilized cap: stabilized NOI (post value-add) ÷ purchase price — yield once business plan executes; on ground-up development, this is the same as Yield on Cost
• Exit cap (going-out cap): assumed cap rate at projected sale year — used to compute reversion value in DCF
• Market cap rate: current submarket trading cap — used as exit cap benchmark
• Spread analysis: going-in cap − senior debt rate = leverage spread; stabilized cap − exit cap = development/value-add spread
• Florida convention: always specify which cap rate is being quoted

Current Florida Going-In Cap Rate Benchmarks

• Multifamily Class A garden: 4.75%–5.50%
• Multifamily Class A mid/high-rise: 4.50%–5.25%
• Multifamily Class B/C value-add: 5.50%–6.75%
• Industrial Class A bulk: 5.50%–6.25%
• Industrial flex/Class B: 6.25%–7.50%
• Retail (Publix-anchored Central FL): 5.50%–6.25%
• Retail (other anchored): 6.00%–7.00%
• Retail (inline/unanchored): 6.75%–8.00%
• Office Class A suburban: 7.00%–8.50%
• Office Class A urban: 6.50%–8.00%
• Medical office: 5.50%–6.50%
• Hotel (select-service): 7.50%–9.00%
• Hotel (full-service): 6.75%–8.50%
• Self-storage: 5.50%–7.00%

How Florida-Specific Factors Move Going-In Cap

• Insurance escalation: at-risk properties (older, coastal) trade at 50–150 bps wider going-in caps to compensate for insurance load
• Post-sale tax reassessment: properties with material below-market in-place tax may trade tighter going-in cap but show lower stabilized NOI after post-sale reassessment
• Hurricane exposure: coastal vs. inland same-class properties can show 25–75 bps cap rate gap
• Submarket growth: high-growth Orlando/Tampa submarkets (Lake Nona, Westshore, Wesley Chapel) trade 25–50 bps tighter than secondary FL submarkets
• Tenant credit (retail/industrial): investment-grade NNN can trade 100+ bps tighter than non-credit
• Lease term remaining (retail/industrial): 15+ year remaining trades 50–150 bps tighter than under 5

What is going-in cap rate?

Going-in cap rate is trailing twelve-month (T-12) NOI or projected year-one NOI divided by purchase price — the entry yield on a CRE acquisition. A property purchased at $20MM with T-12 NOI of $1.1MM has a going-in cap rate of 5.50%. Going-in cap is the central benchmarking metric for entry pricing against current submarket cap rates and against senior debt rate (leverage spread).

How is going-in cap rate different from exit cap rate?

Going-in cap is the entry yield (year-one NOI ÷ purchase price). Exit cap is the assumed cap rate at projected sale year — used to compute reversion value in a DCF analysis. Exit cap is typically modeled at current market cap rate or slightly higher to reflect cap rate expansion risk. The spread between going-in and stabilized cap, and the relationship to exit cap, drives the value-add or development profit math.

What are current Florida multifamily going-in cap rates?

Florida multifamily going-in cap rate benchmarks current to early 2026: Class A garden 4.75–5.50%; Class A mid/high-rise 4.50–5.25%; Class B/C value-add 5.50–6.75%. High-growth submarkets (Lake Nona, Wesley Chapel, Winter Garden) trade 25–50 bps tighter than secondary FL submarkets. At-risk properties (older or coastal with high insurance load) trade 50–150 bps wider.

How do Florida insurance and tax dynamics affect going-in cap rates?

Florida insurance escalation has produced two material going-in cap effects: (1) at-risk properties (older, coastal) trade 50–150 bps wider going-in caps to compensate for the insurance load risk, and (2) properties with material below-market in-place property tax (set to reassess at sale) may trade tighter going-in caps on the T-12 NOI but show meaningfully lower stabilized NOI post-reassessment. Sophisticated FL acquirers always model both going-in and post-reassessment caps.

Who can analyze going-in cap rates on Florida CRE acquisitions?

Michael R. Linton and Linton Global Solutions analyze going-in cap rates daily across Florida CRE acquisitions — multifamily, industrial, retail, office, medical office, hospitality, and self-storage across Orlando, Tampa, and the I-4 corridor. 39 years of Florida CRE transaction experience, active submarket comp data, and Florida-realistic NOI modeling (insurance, post-sale tax reassessment, hurricane reserve) produces going-in cap analysis that reflects the realistic deliverable yield. Call (312) 612-1031.

Article Summary

Going-in cap rate = T-12 or year-one NOI ÷ purchase price — entry yield at acquisition. Distinguishable from stabilized cap (post value-add yield), exit cap (assumed cap at sale), and going-out cap (synonymous with exit cap). FL benchmarks early 2026: Class A multifamily 4.75–5.50%; industrial bulk 5.50–6.25%; Publix-anchored retail 5.50–6.25%; suburban office 7.00–8.50%; medical office 5.50–6.50%; select-service hotel 7.50–9.00%; self-storage 5.50–7.00%. FL insurance escalation and post-sale tax reassessment materially move realistic going-in cap.

Key Takeaways

• ✓Going-in cap = T-12 (or Yr 1) NOI ÷ Purchase Price — entry yield.
• ✓Distinct from stabilized cap, exit cap, and yield on cost.
• ✓FL benchmarks: Class A mf 4.75–5.50%; industrial 5.50–6.25%.
• ✓At-risk FL properties trade 50–150 bps wider for insurance risk.
• ✓Always model post-sale tax reassessment in stabilized cap.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving 500+ banks.

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Works Cited

1. CoStar Group. "Florida Cap Rate Survey." CoStar, https://www.costar.com/. Accessed Jun 9, 2026.
2. CBRE Research. "U.S. Cap Rate Survey." CBRE, https://www.cbre.com/. Accessed Jun 9, 2026.
3. Real Capital Analytics (RCA). "CRE Transaction Data." RCA, https://www.rcanalytics.com/. Accessed Jun 9, 2026.
4. PwC. "Real Estate Investor Survey." PwC, https://www.pwc.com/. Accessed Jun 9, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.