Return on Equity in Commercial Real Estate: A Guide by FNRP

A typical commercial real estate investment is financed with a combination of debt and equity.  In most cases, debt comes from a loan and equity comes from one or more investors who inject capital into the deal.  Naturally, these investors will want to know what their potential return on investment is.  This is measured using […]

Cap Rates in Commercial Real Estate: Formula & Explanation

An Introduction to Cap Rates in Commercial Real Estate

When considering the purchase of a commercial real estate asset, all investors will use a property’s existing cash flows to create a “proforma” financial projection of future cash flows. The proforma, which includes allocations for income and expenses, serves as the basis for calculating the property’s potential return on investment. A diligent investor will use […]