CRE Closing Documents

One of the items you’ll notice listed in the proforma when researching potential commercial real estate investments are closing costs. Today, we’ll break down what is included in those closing costs and what purpose they serve in a commercial real estate transaction. One part of the closing process that you may have heard before if…

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Net Effective Rent

Net Effective Rent, or NER for short, is a measure of the expected income from a tenant, seen mostly in commercial real estate. It is the net present value of all the rental payments over the period of the lease. Net effective rent is the amount a tenant pays to a landlord minus any tenant…

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What is a CAP Rate?

When researching commercial real estate investments, one of the pieces of information you will frequently see listed is the property’s capitalization or “cap” rate. So, what is a cap rate? A Cap rate is the most popular measure through which real estate investments are assessed for their profitability and return potential. The cap rate simply…

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Highest and Best Use

Commercial real estate appraisals must consider the property’s “highest and best use” in relation to valuing the property appropriately. This is because the highest and best use determines the most profitable use of the site, whether vacant land or an existing income producing property. The Fifth Edition of The Dictionary of Real Estate Appraisal by…

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Retail Feasibility Analysis

As we’ve all heard in the news, it is becoming increasingly more difficult to succeed in the retail industry due to growing online sales, and delivery services. In the commercial real estate business, you must take this into consideration when planning any new development as you want your clients to succeed.   One of the…

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Cost Segregation Benefits

Cost segregation is a tax strategy used by real estate investors and property owners to take advantage of accelerated depreciation for some assets that are a part of the property. Typically, commercial properties can be depreciated over a 39-year time frame. An engineering cost segregation study is performed on the property to break down the…

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