Methodology · Glossary
How AcreX Values Commercial Property in New Jersey
Formulas, worked examples with real 2026 numbers, and plain-English answers to the questions owners ask most: cap rate, NOI, NNN vs gross, clear height, IOS and price per SF.
Last updated November 9, 2026 · Data through Q3 2026 · Next update February 2027 · Open the calculator · Value index
The AcreX calculator estimates value three ways and blends them: what similar buildings sold for per square foot, what the building would earn at market rent divided by a market cap rate, and (if you enter it) what it actually earns. Each input range comes from a cited 2026 public source; the formulas below are exactly what the calculator runs.
1. Sales comparison: price per square foot
Formula: Value = building SF × price per SF, where the price per SF is placed inside the sourced low-to-high band for your town and property type.
Where in the band depends on a 0-to-100 feature score: the average of points for clear height, loading, year built and condition (plus parking for retail and office). A score of 0 puts you at the bottom of the band, 50 at the middle, 100 at the top, in a straight line between. The range shown is the score plus and minus 25 points. Features move you within the sourced band; they never add premiums above it.
| Feature | Points (0 = bottom of band, 1 = top) |
|---|---|
| Clear height | Under 18 ft: 0.10 · 18 ft: 0.35 · 24 ft: 0.60 · 28 ft: 0.80 · 32 ft+: 1.00 |
| Loading | None: 0.15 · Drive-in (grade) only: 0.35 · Some dock doors: 0.60 · Good dock ratio: 0.90 |
| Year built or major renovation | Before 1970: 0.15 · 1970s–80s: 0.35 · 1990s–2000s: 0.60 · 2010+: 0.90 |
| Condition | Needs work: 0.15 · Average: 0.50 · Updated: 0.85 |
| Parking (retail, office) | Below typical: 0.20 · Typical: 0.50 · Above typical: 0.80 |
Size: industrial buildings under 10,000 SF sold for about 28% more per SF than larger ones in NJ SR-1A deed records (2024 to 2026), so the band is scaled up for them. Retail under 10,000 SF uses a separate small-retail band.
Worked example A: 50,000 SF warehouse in Fairfield
Inputs: 24 ft clear (0.60), some dock doors (0.60), built 1990 (0.60), average condition (0.50). Score = (0.60 + 0.60 + 0.60 + 0.50) ÷ 4 = 0.575, or 57.5 out of 100.
Fairfield’s own industrial deed sales (13 sales of 10,000+ SF, July 2024 to May 2026, NJ SR-1A deed records) give a band of $179 (25th percentile), $215 (median) and $256 (75th percentile) per SF. At a score of 0.575 the price is $215 + ($256 − $215) × 0.15 = $221.15/SF; at 0.325 it is $202.40 and at 0.825 it is $241.65.
Sales-comparison value: 50,000 SF × $202.40 to $241.65 = $10.12M to $12.08M (middle $11.06M).
2. Income: market rent ÷ cap rate
Formula: Net operating income (NOI) = (warehouse SF × warehouse rent + office SF × (warehouse rent + office premium)) × (1 − vacancy) − landlord-paid expenses. Value = NOI ÷ cap rate.
Rent uses the same feature score inside the sourced rent band. NNN rents assume the tenant pays taxes, insurance and maintenance, so landlord expenses default to zero (enter any you do pay). Full-service office rents subtract operating expenses, defaulting to $8.94/SF/yr (BOMA 2022 study, 2022 data; replace with your actual costs). The cap rate runs from the band’s high end (for the low value) to its low end (for the high value).
Example A continued: market income value
West Essex industrial asking rents run $15.95 (Newmark 3Q26 industrial) to $17.43/SF NNN (Blauberg 1Q26), middle $16.71. At score 0.575 the rent is $16.82/SF. NOI = 50,000 × $16.82 × (1 − 5.3% vacancy, Newmark 3Q26) = $796,332.
Cap rates: 6.36% (Matthews Q3 2026 industrial), 6.7% (Blauberg 1Q26) and 7.0% (Blauberg 3Q26). At score 0.575 the cap rate is 6.65%, so value = $796,332 ÷ 6.65% = $11.98M. The range is $778,623 ÷ 7.0% = $11.12M to $813,378 ÷ 6.36% = $12.79M.
Blended result: with no actual rent entered, sales comparison and market income are weighted 50/50: $10.62M to $12.44M, middle $11.52M. Confidence: medium-high (deep industrial data plus Fairfield’s own deed sales).
3. Your actual rent
If the building is leased, enter the annual rent (or rent per SF). The calculator applies vacancy and any landlord expenses you enter and divides by the local cap-rate band. When actual rent is entered the weights become 35% sales comparison, 45% your income, 20% market income.
Worked example B: 30,000 SF flex building in Totowa leased at $15.00/SF NNN
The $15.00 rent is an example input (it equals the lower Cushman & Wakefield Q2 2026 flex figure the calculator uses for Passaic County). Rent = 30,000 × $15.00 = $450,000. Vacancy 4.1% (Newmark 3Q26, Route 46/23) leaves NOI of $431,550. Passaic County industrial cap rates run 6.36% (Matthews) to 6.6% (Blauberg 3Q26); no flex-specific cap rate is published, so industrial rates are used. Value = $431,550 ÷ 6.6% = $6.54M to $431,550 ÷ 6.36% = $6.79M.
4. Checking an offer: implied cap rate
Formula: implied cap rate = NOI ÷ price. Enter an offer or asking price in the calculator and it shows the implied cap rate next to the local band.
Worked example C: an $11.0 million offer on the example A building
Market NOI of $796,332 ÷ $11,000,000 = 7.24%. That is above West Essex’s published 6.36% to 7.0% range, which means the price is low relative to the building’s market income.
5. Replacement cost check
Formula: hard cost per SF × (1 + North Jersey cost premium) × (1 + soft costs) × building SF × (1 − depreciation you enter) + land value you enter.
Hard costs are REDCOM’s 2026 New Jersey ranges ($80 to $180/SF for warehouse, $120 to $250 for flex, $100 to $250 for retail, $120 to $220 for office), North Jersey adds 10% to 20%, and soft costs add 20% to 35% (REDCOM 2026 cost guide). Replacement cost is shown as a sanity check only and is not blended in.
Worked example D: rebuilding a 50,000 SF warehouse
Low: $80 × 1.10 × 1.20 × 50,000 = $5.28M. High: $180 × 1.20 × 1.35 × 50,000 = $14.58M. Add land, subtract depreciation for age. A sales-comparison value well above replacement cost usually means land or location is doing the work.
6. Office space inside industrial buildings
Enter warehouse SF and office SF separately (or total SF and office %). Lease value = warehouse SF × warehouse rent + office SF × (warehouse rent + office premium). No North Jersey broker report we found publishes a rent premium for office finish inside industrial buildings, so the premium defaults to $0.00/SF and is shown as an editable AcreX assumption. When office is more than 20% of the building the calculator flags it, because heavy office build-out rarely adds value in proportion to its cost.
7. Blending and confidence
| Situation | Weights |
|---|---|
| No actual rent entered | 50% sales comparison, 50% market income |
| Actual rent entered | 35% sales comparison, 45% your income, 20% market income |
| Outdoor storage (IOS) / land | 100% price per acre (no published IOS rents or cap rates) |
Confidence starts from how deep the public data is for the property type (industrial highest; flex, office and IOS lowest), rises when the town has its own deed sales or you enter actual rent, and falls when the methods disagree by more than 30%.
8. What the public data cannot see
Building SF, clear height, docks, parking and office share are not in NJ public tax records, so the owner enters them. MOD-IV sale fields can lag recent deeds. Broker reports average many buildings and lag the market by one to two quarters. Environmental issues, leases, zoning approvals and deferred maintenance are not modeled. For a decision, get a written broker opinion of value or an appraisal.
Updates: quarterly, after the Q4 2026 broker reports are published (next update February 2027). Every figure on the NJ Commercial Value Index carries its source and date.
Glossary: common owner questions
What is a cap rate?
A cap rate (capitalization rate) is a property’s net operating income divided by its price. A building earning $700,000 a year in NOI that sells for $10 million traded at a 7.0% cap rate. Lower cap rates mean higher prices for the same income. Published North Jersey industrial cap rates ran about 5.9% to 7.2% in 2026.
What is NOI (net operating income)?
NOI is the rent a property collects after vacancy and the operating costs the landlord pays, before mortgage payments and income taxes. It is the number a cap rate is applied to.
What is the difference between NNN and gross rent?
NNN (triple net) rent excludes property taxes, insurance and common-area maintenance, which the tenant pays on top. Gross or full-service rent includes them, so it is quoted higher. NJ industrial and retail rents are usually NNN; office rents are usually full service.
What is clear height?
Clear height is the usable height inside a warehouse, from the floor to the lowest obstruction such as beams, joists or sprinklers. Modern distribution buildings are built much taller than most older North Jersey stock. Higher clear height lets tenants rack more goods and generally commands higher rent and sale prices.
What are dock doors and drive-in doors?
A dock door (dock-high door) sits at truck-bed height so trailers can be loaded straight across; a drive-in (grade-level) door lets trucks or forklifts drive into the building. Warehouse tenants usually want docks; buildings with only drive-ins tend to sit lower in the value band.
What is IOS (industrial outdoor storage)?
IOS is industrial land used mainly for parking or storing trucks, trailers, containers or equipment, usually with little or no building. It is priced per acre rather than per square foot. Reported 2026 North Jersey IOS and small industrial-site sales ranged from about $3.6 million per acre (Hillside) to nearly $7 million per acre (Moonachie).
What is price per square foot?
Price per SF is the sale price divided by the building’s rentable or gross square footage. It is the quickest way to compare sales of different sizes, but it ignores lease income and land, so the calculator pairs it with an income check.
What is RBA?
RBA (rentable building area) is the total leasable square footage of a building, including office and warehouse areas. It is the SF figure used for price per SF and rent per SF.
What is a broker opinion of value?
A broker opinion of value (BOV) is a written estimate of a property’s likely sale price or rent prepared by a licensed broker from comparable sales and leases. It is not an appraisal, but it is the usual starting point for pricing a listing.