4 Steps to Evaluating CRE Investment Opportunities
4 Steps to Evaluating CRE Investment Opportunities For individuals interested in commercial real estate investing, there are a number of ways to gain exposure to this asset class. And for those investors looking to earn passive income, a common strategy is to partner with a private equity firm. A private equity firm is a specialized […]
Private Equity Commercial Real Estate Investment: Calculating Loss to Lease
Private Equity Commercial Real Estate Investment: Calculating Loss to Lease In a value-add real estate investing strategy, investors seek to acquire an investment property at a favorable price and improve it through a variety of means. For example, one of the most common strategies is to invest in capital improvements and renovations that will allow […]
7 Purchase and Sale Agreement Clauses
If, after performing the initial due diligence on a commercial property, a commercial real estate investor decides that he or she would like to proceed with a purchase, the next step is to submit an offer. In most cases, the offer is submitted on an official document known as a purchase and sale contract. What […]
Title Insurance For Commercial Real Estate: Ultimate Guide
A typical commercial investment property may be 20+ years old. In many cases, this means that it has had several owners and it may have been subject to zoning changes, different mortgages, and multiple renovations. Given all of this activity, it can occasionally be a challenge to determine who actually holds title to a property. […]
What is Tenant Concentration Risk?
Many commercial real estate shopping centers have a similar configuration. Typically, they have an “anchor” tenant who leases the majority of the total space in the property. And in many cases, these tend to be a large, recognizable company whose goods or services attract traffic to the center. As such, the anchor tenant is usually […]
What is Yield on Cost in Commercial Real Estate?
One of the most fundamental concepts in commercial real estate (CRE) investment is understanding the relationship between risk and return. The more risk a commercial property carries, the greater the potential reward. However, risk can be tricky to quantify because it is all relative. Each investment and each CRE property type carry their own levels […]
Understanding Commercial Real Estate (CRE) Promotes and Preferred Returns
Most private equity commercial real estate deals follow a “waterfall” return distribution. For many investors, the term “waterfall” can be intimidating, but it is simply a method of describing how a property’s returns are split between the various individuals involved in the investment. For anyone considering a private equity real estate investment opportunity, it is […]
What is the Relationship Between Capital Expenditures and Rent Increases?
At First National Realty Partners, we are value-add investors. This means that we intentionally seek out real estate that we can purchase at or below replacement value and for which we can implement our value-add program. The goal of the value-add program is to increase the property’s Net Operating Income, which will also improve its […]
Entry Cap Rate vs. Exit Cap Rate: Difference & Calculation
Commercial real estate investment returns come from two sources, income and capital appreciation. While income provides steady cash flow over the life of the investment, capital appreciation is where the big gains can be earned. During the pre-purchase due diligence phase of the transaction, it is the real estate investor’s job to estimate both the […]
