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What is a Tenant Estoppel Certificate, and Why Is It Needed?

Tenant Estoppel Certificate

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

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

Pari Passu meaning

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?

What is Gross Leasable Area (GLA)

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

How to Calculate Net Present Value

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

Cross Collateralization

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

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

Understanding Mortgage Basis Points in Commercial Real Estate

What are Mortgage Basis Points

In every financial transaction, the details determine the rate of return or profitability of any deal. One component of that process is mortgage basis points. Base points are used in a wide range of financial components of any commercial mortgage transaction. This includes spreads and fees.

Understanding Mortgage Basis Points

Sometimes called BPS, mortgage basis points help to measure financial instruments. Most often, each point … Read More

What are Rental Concessions and When Should You Offer One?

What are Rental Concessions

Commercial property investors need to offer potential tenants attractive terms, or else risk having the best tenants sign leases elsewhere. Rental concessions are one common way to entice tenants with more attractive terms. Here’s a look at what lease concessions are, their advantages and disadvantages, and when you might use them.

What is a Rent Concession?

A rental concession is a temporary or permanent modification … Read More

Commercial Hard Money Loans: Everything You Need to Know

Commercial Hard Money Loans

Hard money commercial loans could be a viable option for some investors looking for a way to buy real estate outside the traditional methods. For those considering these loans, it is critical to learn their requirements and implications.

What Is a Commercial Hard Money Loan and How Does It Work?

Commercial hard money lenders have different rules and requirements for borrowers to follow. They also … Read More