Effective Gross Income: A Calculation Guide

Effective gross income is a line item on a real estate proforma that is commonly used by appraisers, investors, and other commercial real estate professionals. Although the effective gross income is easy to understand conceptually, the calculation itself can sometimes be confusing. In this article, we’ll take a closer look at effective gross income and clear …

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Yield on Cost: A Beginner’s Guide

The yield on cost is a commonly used metric when evaluating real estate development and value-add projects. It is easy to calculate and is useful as a back of the envelope calculation. In this article, we’ll take a closer look at the yield on cost in real estate. Here’s what you’ll learn: What is the …

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Year Over Year (YOY) Analysis: A Simple Guide

What is Year Over Year (YOY)? YoY stands for Year over Year and is a type of financial analysis used to compare results from a period of time in one year to the same period of time in the prior year. YoY analysis is widely used in finance and economic analysis and is helpful for …

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Gross Income Multiplier: A Calculation Guide

The gross income multiplier is a metric used in commercial real estate valuation by analysts and appraisers. It is easy to calculate and requires little information, but it does come with some limitations. In this article, we’ll take a closer look at what the gross income multiplier means with several examples, including the potential gross …

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How to Use SUMIF In Commercial Real Estate Analysis

When working with a commercial real estate data set, there are occasions where it is necessary to create a sum for a range of values, but only if they meet certain criteria.  Fortunately, there is an easy way to accomplish this task using a built in Microsoft Excel function known as “SUMIF.” In this article, the SUMIF function …

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Introduction to Comparative Lease Analysis

Suppose that a medium sized accounting firm is looking to expand its footprint by leasing office space in a new city.  After touring several spaces, they have narrowed it down to two options.  The options have similar rental rates, but the firm wants to conserve capital so they need to figure out which one is less …

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How the Development Spread Works

The development spread is a back of the envelope calculation widely used by real estate developers. It is a fast and easy way to size up the financial feasibility of a real estate development project, prior to completing a more in depth analysis. In this article we’ll take a closer look at the development spread …

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How The Double Net Lease Works

There is a wide spectrum of lease types in commercial real estate. To make it easier to communicate with others, it is not uncommon for complicated leases to be described using simple language. The ‘double net lease’ in commercial real estate is a term that describes a certain type of lease agreement, but it’s not …

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How The Single Net Lease Works

In the commercial real estate industry there are a variety of lease types and also various names used to describe those leases. The term “single net lease” is sometimes used in commercial real estate to describe a lease where the tenant is responsible for paying one particular expense. In this article we’ll discuss the single …

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Coronavirus Commercial Real Estate Survey Data

Last week we surveyed our audience about the immediate impacts of the Coronavirus pandemic on commercial real estate professionals. Below are the results and we will update with additional survey data over time.