Category: CommLoan Academy
What are the Types of Commercial Leases?
Real estate investors commonly need to rely on a commercial lease to create a legally binding contract with their clients. Understanding the types of leases available is a big part of ensuring the best long-term results.
Understanding Commercial Leases
A commercial lease may not seem like a complicated process and may seem to be much like a traditional residential lease. However, there are differences that … Read More
Tenant Improvements in Commercial Real Estate
Tenant improvements affect property value, tenant satisfaction, leasing terms, insurance coverage (for the tenant), and more. If you’re involved in commercial real estate in any way, it’s essential that you understand what qualifies as leasehold improvements and what doesn’t. Here’s a look at what tenant improvements are, and the corresponding implications.
What Exactly is a Tenant Improvement?
A tenant improvement, also known as a leasehold … Read More
How Much Does it Cost to Build an Apartment Complex
The decision to invest in real estate does not always come from purchasing pre-existing property. With a better understanding of multifamily apartment costs, some investors may hope to build from the ground up.
Stages of Apartment Complex Construction
Building an apartment complex requires numerous steps. The process typically involves three phases.
The pre-construction process is the planning and development phase. The focus here is … Read More
What is a Tenant Estoppel Certificate, and Why Is It Needed?
Tenant estoppel certificates are common in commercial real estate when leased properties are financed, refinanced, sold, or otherwise transferred. Tenants are often asked to sign certificates in order to confirm details of their lease for third parties.
The purpose of these certificates is to confirm the most pertinent details of a lease, usually for a third party that’s involved in the property transaction.
What is … Read More
Understanding Leasehold Estate
Leasehold estate or leasehold property is a term often heard in relation to accounting. It refers to an asset of some type that is being leased. In commercial real estate, a leasehold is likely to be a space or building. This term is not commonly used today, but it is still a factor investors should consider when involved in commercial real estate transactions.
What Is … Read More
Understanding Pari Passu in Commercial Real Estate
The world of commercial real estate (CRE) is filled with complex financial arrangements, and understanding the terms involved is essential to maximizing returns and reducing risk. One of these terms,”‘ pari passu,” plays a significant role in the organization and distribution of funds within a commercial real estate transaction. Every investor who’s involved in a multi-party real estate arrangement should understand what’s meant by pari … Read More
What is Gross Leasable Area in Commercial Real Estate?
The size of a commercial investment property is one of the most important factors when projecting the property’s potential revenues. This is perhaps the most important factor aside from location and type of property, for size directly impacts the potential rents that a property can generate.
Specifically, investors should consider the gross leasable area (GLA) of a property when projecting rents and revenues. GLA best … Read More
How to Calculate Net Present Value in CRE
Rational investors are seeking to grow their assets over time, and assessing the time value of money is an essential step when evaluating different investment opportunities. Net present value (NPV) allows investors to include the time value of money in property valuations. It’s a must-know number when evaluating a commercial real estate property or portfolio.
What is Net Present Value (NPV)?
Net present value is … Read More
Understanding Cross Collateralization in Commercial Real Estate
A cross-collateral loan could be an option for investors who own assets and want to extend their portfolio. Yet, like most opportunities, there are some risks to understanding this process. For those who have collateral, it is worth taking a closer look at how cross-collateral loans could help provide an opportunity to invest at a lower cost.
What Is Cross Collateralization in Commercial Real Estate? … Read More
Understanding Gross Potential Rent
Investors considering the purchase of a real estate for rental purposes must determine the estimated value of that property. One component of that process is to evaluate the potential income a property can offer. This is where the gross potential rent formula is helpful.
What is Gross Potential Rent?
Gross potential rent is a metric that investors use to determine the amount of expected income … Read More