Internal Rates of Return for Commercial Real Estate

Building on our article from last week, we’re going to focus this week on a commonly used term in finance called the Internal Rate of Return (IRR). Before we get into IRR, we first need to give a quick refresher on capitalization (cap) rates. The formula can be expressed graphically as follows: Where: I =[…]

Understanding Income Property Values

MORE THAN JUST A “CAP” RATE Properly assessing a commercial investment property’s value is a complex and lengthy activity. Due to the time consuming nature of the process, the temptation is to simply apply the prevailing cap rate in the market to the potential net operating income. The problem with this basic calculation is that[…]