Cap Rate is the First Number Investors Look At And the Last One They Should Rely On

Cap rate is probably the single most referenced metric in commercial real estate. It's also the most misunderstood. And if you're using it the wrong way, it's costing you deals. In this episode of the CRE Playbook Podcast, John Heisler breaks down everything you actually need to know about cap rates, not just what the formula is, but how to use it correctly when buying, selling, refinancing, and stress testing a commercial deal. This is Part 1 of a two-part series. Part 2 covers Treasury yields, bonds, and how interest rates actually move cap rates (available next wext week) 🎙️ The CRE Playbook is the show that takes you from zero to one in getting your first commercial building. New episodes every week — real deals, real frameworks, no fluff. 📩 Want to learn more? Visit cre-playbook.com Follow us on our socials! Instagram:   / cre.playbook   Facebook: https://www.facebook.com/profile.php?... X: https://x.com/cre_playbook Spotify: https://open.spotify.com/show/033kjB5... Apple Podcast: https://podcasts.apple.com/es/podcast... Follow John Heisler on his socials! Instagram:   / john.w.heisler   Facebook:   / john.heisler.142   ⏱️In this episode: 0:00 Intro 2:05 What cap rate actually is 3:34 Why cap rates exist 5:49 Who sets cap rates and what moves them up and down 8:46 Cap rates by asset class in 2026 11:14 The most common cap rate mistakes investors make 12:11 How to use cap rates in practice: Entry, Exit & Value-Add Deals 17:42 NOI Explained: What's in it, What's not, and Why it's the foundation of everything 18:31 Key Takeaway: What the best investors actually do with cap rates 18:54 Homework! 19:45 What's coming in next episode: Treasury Yields, Bonds & How interest rates affect cap rates