How to Invest in Commercial Real Estate
Commercial real estate (CRE) is a broad category with a wide variety of property types, property classes, and investment vehicles. For individuals new to investing in commercial real estate, the number of options can be overwhelming and confusing, but they don’t have to be. By following a few steps, an investor can quickly filter through […]
What is Net Asset Value (NAV) in Commercial Real Estate Investing?
When an individual chooses to invest in a private equity real estate transaction, it typically means they are purchasing securities in a company that owns and operates a piece of real estate. In some cases, the company may own a single property (as is the case in many of our transactions) or, in other cases, […]
Understanding the Secondary Market for Commercial Real Estate Loans
There are an endless number of commercial real estate (CRE) lenders and they all seem to have slightly different criteria that must be met for a loan to be approved. For example, a lender in New York may have a minimum liquidity requirement that must be met to receive the most favorable multifamily loan pricing […]
What is a Cap Rate in Commercial Real Estate?
There is a common saying in real estate investing circles that states “something is only worth what someone is willing to pay for it.” One of the most common ways real estate investors determine what a property is worth is by using a multi-purpose metric known as the Capitalization Rate or “cap rate” for short. […]
Understanding the Internal Rate of Return
Fundamentally, the idea of making a commercial real estate investment is a simple one. An individual contributes a certain amount of capital towards the initial cost of an investment property. In doing so, they expect that they will receive their initial investment back, plus a return over time. Prior to making an investment decision or […]
What is the Debt Service Coverage Ratio?
Nearly all commercial real estate transactions are financed with some combination of debt and equity. The equity comes from the potential property owner and/or their investors while the debt comes from a bank or non-bank lender. The exact amount of each can vary by transaction, but equity typically consists of 15% – 25% of the […]
Understanding Passive Commercial Real Estate Investment Opportunities
There is a commonly cited belief among real estate investors that an investment in commercial real estate rental properties can provide passive income. This is only partially true. Yes, passive or “hands-off” income and cash flow is possible, but the property management for a commercial real estate asset is far from a passive endeavor. All […]
Understanding the Equity Multiple
Prior to deploying funds into a commercial real estate investment opportunity, it is absolutely critical to perform a significant amount of due diligence on the target property. This due diligence includes a review of the physical aspects of the property like its condition, location, and a review of the financial aspects of the property like […]
What Kind of Commercial Real Estate Investor (CRE) Are You?
Commercial real estate investment properties come in all shapes, sizes, types, classes, conditions, prices, and in different locations. In addition, the method or vehicle through which to invest can vary from one transaction to another. For individual investors who are interested in commercial real estate investing and the portfolio diversification that it brings, the choices […]
