What Is Loaded Cap Rate?
A loaded cap rate is a cap rate that has been adjusted to already reflect an add-on cost — most often a capital reserve for future replacements — so buyers can compare quoted cap rates on an apples-to-apples basis when sellers define NOI differently.
Why It Matters
Two listings quoting the same headline cap rate can have very different real returns if only one NOI figure already deducts a reserve for capital expenditures — always check what's "loaded" into the number.