A mini-perm loan is a crucial financial tool for developers and real estate investors, providing short-term financing for newly constructed for-lease projects. This type of loan is typically used to refinance a construction loan and allows borrowers to pay off the original interest-only loan, stabilize their operations, and then refinance with a longer-term loan or …
Valuing commercial property is an important step in every commercial real estate transaction. This post will demystify the commercial property valuation process and walk you through some common valuation techniques used in the commercial real estate industry. What is Value? Before we dive into understanding commercial property valuation, let’s take a step back and ask …
The real estate investment industry involves a lot of math, and understanding real estate finance includes knowing a lot of formulas and ratios. Sometimes it’s easy for even the best of us to forget or confuse many real estate formulas. This post will serve as a helpful guide to common real estate formulas you should …
Discounted cash flow analysis for real estate is widely used, yet often misunderstood. In this post, we’re going to discuss discounted cash flow analysis for real estate and clear up some common misconceptions. As you follow along, you might also find this discounted cash flow analysis spreadsheet template helpful. Discounted Cash Flow Real Estate Model First, …
The first task in any real estate investment decision is to build a proforma, which is just a word that means cash flow projection. In this guide, we will define the term proforma, look at an example of a simple real estate proforma, review a more complicated real estate proforma, and also discuss some nuances …
Commercial real estate can be broken down into several different categories. At a high level, when people think of different types of commercial real estate, they typically think about shopping centers, office buildings, or warehouses. But the commercial real estate industry is much more precise when it comes to defining property types. Below is a …
What’s the intuition behind Internal Rate of Return (IRR) and Net Present Value (NPV)? Discounted cash flow analysis is an essential tool in the commercial real estate practitioner’s tool belt, but unfortunately for many people, there is still a lot of mystery surrounding this concept. First, let’s get some definitions out of the way, and …
People will often say that they want a commercial real estate career, but quickly discover that “commercial real estate” is a vague job description and can literally mean dozens of different things. In this post, we will discuss various commercial real estate career paths to better understand the major players and the structure of the …
Here is the December 2012 edition of our employment growth trends data. If you’d like to access more data like this, complete with interactive charts and graphs for every state, MSA, and county in the United States, sign up now for a free trial.
The recession officially ended back in 2009 and the economy has been growing ever since, yet it still feels like a recession to most people. Why is this and how long will it take to get back to normal? More importantly, what does this mean for commercial real estate? First, let’s take a look at …