Securing a commercial construction loan for various types of commercial real estate can be a difficult process to navigate. This post will shed some light on commercial construction loans and demystify the lending process. Commercial Construction Loans and Lenders The construction loan process begins when a developer submits a loan request with a lender. Construction …
After you win a listing for a commercial property the real work begins. You now need to deliver on your promise of selling the property for the highest price possible in the least amount of time. To keep your client happy, you also need to make the process stress-free for all parties involved. Want some …
Understanding the difference between the net present value (NPV) versus the internal rate of return (IRR) is critical for anyone making investment decisions using a discounted cash flow analysis. Yet, this is one of the most commonly misunderstood concepts in finance and real estate. This post will help you understand the difference between NPV vs …
The purpose of this article is to shed some light on how a bank evaluates a loan request from a potential borrower. But, before we get there, let’s have a quick review of how a bank works and who the key players are in the credit approval process. In it’s simplest form, a bank makes …
Understanding commercial real estate leases takes careful attention to detail. People will often categorize a lease as either a triple net lease or a full service (gross) lease. The reality is that most lease agreements fall somewhere in the middle of this spectrum where both the landlord and the tenant each pay some share of operating …
The capitalization rate, or cap rate, is one of the most important metrics in commercial real estate. It is calculated by dividing a property’s Net Operating Income (NOI) by its value. Commercial real estate professionals use cap rates to compare property returns, assess market trends, and estimate valuation. This guide will break down the cap rate formula, provide real-world …
Understanding the terms of a commercial real estate lease can quickly become a challenging task. One lease term that people often find confusing is the expense stop. In this post, we discuss what an expense stop is, how an expense stop is typically used, and then walk through an example to bring it all together. …
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 Commercial real estate industry involves a lot of math and requires a solid understanding of financial metrics and formulas. These calculations help investors assess profitability, compare properties, and make informed decisions. This guide covers essential real estate investment formulas, their applications, and when to use them. Table of Contents Net Operating Income (NOI) Effective …