Realmo Blog - Page 4

What a cap rate is, how it’s calculated, what moves it, and how to use cap rates to compare commercial properties and back into value.

Definitions for every commercial asset class and subtype – anchor tenant, clear height, RevPAR, flex, last-mile – in one reference list.

Churches, theaters, car washes, bowling alleys: why single-use buildings are hard to finance, harder to resell, and how appraisers value them.

Land has no income and all the optionality. Zoning, entitlements, carrying costs, financing limits and how investors underwrite a development site.

Flex space puts office and warehouse under one roof. How flex buildings are configured, who rents them, how rent is quoted and what leases cover.

Three approaches drive every commercial valuation: income, sales comparison and cost. When each applies, how appraisers reconcile them, what moves value.

How retail makes money: anchor and inline tenants, NNN leases, percentage rent, CAM recovery, co-tenancy clauses and the real e-commerce risk.

Termination rights come with notice periods and fees: unamortized TI, commissions and penalty months. How to price and negotiate a break option.

One rent number covers everything in a full service gross lease. How base year and expense stops work, and what pushes costs back onto the tenant.

Good comps share use, size, location, date and lease structure. Where to find commercial sale comps, how many you need, and which adjustments matter.

AVMs price property from public records, comps and statistical models. What data they use, where confidence scores come from, and why CRE is harder.

A first-time buyer’s roadmap: setting criteria, running the numbers, lining up financing, doing due diligence and closing without overpaying.

Comparable sales set value when the market is active. How to select comps, adjust for differences, and weight the results into a defensible value.

Who does what at each stage of a commercial real estate transaction, which documents change hands, and where deals most often stall or die.

Walk through a CRE deal step by step: sourcing, LOI, contract, due diligence, financing and closing – plus how long each stage usually takes.

A plain-English glossary of commercial real estate terms, from anchor tenant to vacancy rate, with short definitions and links to full guides.

Who orders the appraisal, what the appraiser inspects, how long it takes, what it costs, and what to do when value comes in below contract.

Commercial real estate explained: property types, how deals and leases work, who earns what, and how CRE differs from residential investing.

Stabilization means occupancy and income have settled at market levels. The thresholds lenders use, and why the label changes your financing terms.

Four risk profiles, four return targets. How core, core-plus, value-add and opportunistic strategies differ in leverage, business plan and target IRR.

The same building prices differently in different metros. How liquidity, growth, taxes and buyer depth create gaps between primary and tertiary markets.

Multifamily and industrial trade tighter than office or hotels. Why cap rate spreads exist between property types, and what they say about risk.

Change one assumption at a time and watch returns move. How to build rent, exit cap and interest rate sensitivity tables, and what ranges to test.

Reversion often drives most of a DCF’s value. How to derive terminal value from the exit cap rate and forward NOI, and how to net out selling costs.