Eric Little

Rent is obviously the amount tenants pay for their leased spaces, but it can be calculated in a couple of different ways. Net effective rent calculates the amount that leases generate on an average monthly basis. Landlords may strategically use net effective rent in their listings and marketing, and they should know it even if they don’t advertise rent this way.

What Does Net Effective … Read More

A commercial real estate property’s potential income isn’t just the monthly rents times twelve. Such a simple approach misses additional revenue sources and potential costs, and thus doesn’t fully and accurately reflect the income that the property should generate. Instead, calculating effective gross income provides a much more accurate estimate of potential income.

What is Effective Gross Income (EGI)?

Effective gross income (EGI) projects the … Read More

Tenancy in common (TIC) is a real estate transaction in which there are more than one owner of a specific property. It is not an uncommon situation, but it is one that can have both good and bad factors related to it. Understanding tenancy in common in a commercial real estate transaction is a critical step if this type of structure will be used.

What … Read More

Equity multiple represents the absolute return of an investment. It’s widely used in private equity and commercial real estate as a litmus test. There are fewer quick ways to calculate the potential or actual total return of a property (or deal).

What Does Equity Multiple Mean?

Equity multiple demonstrates, in a straightforward way, the total return that investors will receive on their total investment. It’s … Read More

Triple net properties, sometimes called NNN, are a form of commercial real estate. Those considering the investment in these properties should understand what this term means and how it applies to their situation.

What Does Triple Net Mean in Commercial Real Estate?

A triple net lease is a type of commercial lease that includes a provision that the lease remains responsible for covering some of … Read More

A variety of commercial leases are available. This helps ensure there is something available to fit any need and most challenges.

There are two main types of commercial leases. The first is a gross lease, and the second is a net lease. It is also sometimes called gross rent vs net rent. The type determines who pays for various expenses associated with the use of … Read More

Understanding loan to cost meaning is quite important to investors. This ratio is a valuable metric used in commercial real estate construction (and other areas) to determine whether a transaction may be profitable or beneficial to that investor. It compares the cost of financing a project (usually as a loan) to the cost of building the project. By utilizing this metric, lenders can better determine … Read More