What Is a Gross Rent Multiplier (GRM)?

GRM is price divided by gross annual rent. See a strip center example and why GRM misleads when lease structures differ.

October 04, 2026 • 5min read

Definition

The gross rent multiplier is a property’s price divided by its gross annual rental income. It shows how many years of gross rent the price represents and ignores expenses, vacancy and financing. It is a screen, not a valuation.

Formula

GRM = price ÷ gross annual rent.

Example

Two 30,000 square foot strip centers are each priced at $6,500,000 and each collect $620,000 of gross income, a GRM of 10.5. Center A has triple-net leases and absorbs $165,000 of expenses: NOI of $455,000, a 7.0% cap rate. Center B has modified gross leases, absorbs $225,000 and earns $395,000, a 6.1% cap rate. At a 7.0% cap rate, Center B is worth about $860,000 less. GRM saw no difference.

In practice

Brokers use it to sort comps and talk pricing with small-property owners. Investors sort listings before ordering financials. Institutional buyers rarely use it.

Watch for

Inconsistent definitions of gross rent, with or without recoveries. The same multiple means different things when tenant sales are rising and when they are falling, so retail broker tools now pair the ratio with sales per square foot data. CenterCheck’s store level estimates serve that purpose.