Calculate Gross Rent Multiplier to quickly compare property values relative to gross rental income. A fast screening tool for CRE investment opportunities.
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GRM = Purchase Price ÷ Annual Gross Rent. A GRM of 8 means it takes 8 years of gross rent to equal the purchase price. Lower GRM = potentially better value. It is a rough screening tool — not a replacement for cap rate or full underwriting since it ignores expenses.
GRM uses gross rent (before expenses). Cap rate uses NOI (after expenses). GRM is faster to calculate when you don't have expense data. Cap rate is more accurate. Use GRM to quickly screen properties, then run cap rate and DSCR analysis on the ones that pass the initial filter.
Multifamily: 7–12x. Retail: 6–10x. Office: 8–14x. Industrial: 6–9x. Lower GRM markets tend to have higher cap rates and higher yields but potentially more risk. Gateway cities (NYC, SF, LA) often have GRMs of 15–20+ due to appreciation expectations.
GRM ignores operating expenses entirely. A property with 8x GRM but 60% expense ratio may perform worse than one with 10x GRM and 30% expenses. Always follow up with NOI, cap rate, and DSCR analysis. GRM is the starting point, not the finish line.
Typical ranges across major CRE asset classes.
| Property Type | GRM Range | Implied Cap Rate | Notes |
|---|---|---|---|
| Multifamily (B/C) | 7–10x | 6–8% | Higher expenses, value-add potential |
| Multifamily (A) | 10–15x | 4–6% | Lower cap rate, appreciation play |
| Retail (NNN) | 8–12x | 5.5–7% | Low expenses, tenant pays most |
| Industrial | 6–9x | 5–7% | Low expense ratio, strong demand |
| Office (Suburban) | 8–12x | 6.5–8.5% | Higher expenses, tenant risk |
| Self-Storage | 7–10x | 5.5–8% | Operator-intensive |
Common questions about GRM in CRE.
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