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How to Determine the Highest and Best Use of a Property

Highest and Best Use

Commercial real estate investors are generally familiar with appraisals, which seek to value a property accurately. Appraisals are used for home purchases, vacant land purchases, commercial real estate purchases, and the evaluation of most other properties.

The highest and best-use appraisal (HBU appraisal) is especially important in commercial real estate. This specific type of appraisal calculates property value according to how a property can be … Read More

What is Unlevered Free Cash Flow in Real Estate?

Unlevered Free Cash Flow

Real estate investments require evaluation from multiple angles and using multiple metrics. One metric that’s gained increased popularity in recent years is unlevered free cash flow (UFCF). This calculation provides a unique perspective on an investment’s financial performance, focusing on how much cash flow a property generates.

What is an Unlevered Free Cash Flow in Real Estate?

Unlevered free cash flow calculates the cash flow … Read More

A Comprehensive Guide to Mixed-use Commercial Property

Mixed Use Commercial Property

Diversification has an important place in any long-term real estate portfolio. Commercial real estate offers one way to diversify if your portfolio is overexposed to small residential, and there are many opportunities to diversify within commercial real estate. One of the most effective is mixed-use commercial property.

What is Mixed-Use Commercial Property?

Mixed-use commercial property is a development that combines at least two different uses, … Read More

What are CAM Charges?

CAM Charges

CAM charges are a common term seen on many commercial leases and in various transactions. It refers to the expenses the property owner charges back to the tenant for maintaining the specific area described. There are many factors to consider related to CAM, and understanding how this relates to any contract or lease agreement is critical prior to entering into such an agreement. Consider what … Read More

What is Commercial Equity Line of Credit (CELOC)?

Commercial Equity Line of Credit

Commercial real estate investors have access to many different financing programs when they first purchase a property, but sometimes capital’s needed after a property is already owned. A commercial equity line of credit (CELOC) allows investors to use their equity as a means of attaining as-needed financing.

Understanding Commercial Equity Line of Credit (CELOC)

A commercial equity line of credit is a financing option that … Read More

What Does PSF Stand for in Real Estate?

PSF (Per Square Foot) in Real Estate

What is PSF in real estate? Per square foot, often called just PSF in commercial real estate, is a very important term to understand when buying, leasing, or managing these properties. It is a method often used in calculating the real estate rental value and communicating the size and scope of a property for sales transactions. Understanding what it is and the PSF rate within … Read More

What is Covered Land Play?

Covered Land Play

A covered land play is a real estate strategy. It is a valuable investment concept that focuses on the increased value a property represents that’s covered. Though a bit more complex, it helps to see how this may work.

What Is a Covered Land Play?

A covered land play is an investment strategy focused on the value of a piece of property. To understand it, … Read More

Tenancy at Will: Definition and Pros and Cons

Tenancy at Will

The landlord-tenant relationship may be arranged in several different ways in commercial leases. Tenancy at will is one of the most flexible arrangements, but flexibility has both its advantages and disadvantages. Here’s a look at what tenancy at will offer both landlords and tenants.

What is Tenancy at Will?

A tenancy at will is a rental agreement in which either the landlord or the tenant … Read More

How Much Does it Cost to Build a Hotel

How Much Does it Cost to Building a Hotel

The investment in building a hotel could prove valuable to many investors looking to launch a new venture in a promising community. Hospitality may be a lucrative commercial real estate investment for many, but there are numerous costs to keep in mind, and those costs can amplify over time depending on the size, location, and type of project. Consider the following to learn more about … Read More

Understanding RUBS Income in Commercial Real Estate

RUBS Income

Property owners of multifamily or multi-unit commercial real estate must determine the most appropriate way to ensure utilities are paid. One option is to pay all utilities for units and charge some set amount extra to do so. A secondary method involves installing submeters at each unit to charge these costs based on actual use. However, both methods have limitations, so some investors use Ratio … Read More