CRE MATH
NOI divided by Purchase Price gives you this calculation.
(Ex: A property’s (?) is 10 percent if it is purchased for $10 million and produces $1 million in NOI during one year.)
What is capitalization rate (cap rate)?
What is the metric that measures the amount of self-storage space per person in a trade area?
Supply Index
NOI
Net Operating Income
Two part answer:
1. Besides Nick, who closed the very first Apex deal?
2. Besides Nick, who closed the largest fee for Apex?
1. Jacob M
2. Justin F
Type of lease where tenant pays base rent and then separately pays their share of operating expenses, insurance, and real estate taxes
What is a NNN (net) lease?
In lending what does LTV mean?
Loan to Value
How many sqft is this facility based on this unit mix? 20 5x10s.
38 10x10s
30 10x20s.
5 10x30s
12,300 sqft
EMD
Earnest Money Deposit
On our contract who typically is our title company?
Fidelity National Title
Small Bay Flex Property is 50,000 nrsf. Rents are $10 Modified Gross. Expenses/CAMS in market are $3.50. What is our 10 cap offer?
$3,250,000
This future projection calculates the potential income of a property.
What is Pro Forma or GPRI?
Type of insurance storage owner can sell or require their customers to have.
What is Tenant insurance?
DSCR
Debt service coverage ratio
The debt-service coverage ratio formula divides the annual net operating income (NOI) by its total annual debt service.
What % of the purchase price is the max EMD we typically try to stick to?
1%
In flex/industrial, what is the vertical distance called from the floor to the lowest point of the ceiling?
Clear Height
In industrial real estate, a property's clear height is the height to which product can safely be stored on racking. Clear height can also be defined as the height of a building from the floor to the bottom of the lowest hanging item on the ceiling (i.e. sprinklers, lights, etc.).
What would monthly payments be for this seller financing offer?
Purchase Price: $2M with 400k down. 5% interest on a 25 year am on remaining balance.
$9,353.44
This environmental inspection report is completed by most buyers and may be required by the lender during the Due Diligence Period.
What is Phase 1?
CAM
CAM stands for Common Area Maintenance, and it's a fee that tenants pay to landlords to cover the costs of maintaining shared spaces in a commercial property.
In real estate, what type of expense will go toward adding to or improving a property beyond common, routine repairs and maintenance? These are large costs that are incurred outside of the normal day-to-day operations of the property.
CapEx (Capital expenditures)
2 Part Answer for Timeline of a 1031 Exchange.
How many days to Identify?
How many months to Close?
45 days to Identify & 6 months to Close.
What is the cash on cash return on this deal?
A buyer purchases a storage deal for $1 million. The buyer uses $250k to invest in the deal and then seller finances the remaining $750k.
NOI= 100k
Annual Debt Service= 45k
CoC= ?
22% CoC
Annual Net Cash Flow / Invested Equity = Cash on Cash Return
An 8 cap may work for this nice 50k sqft storage facility (35k gross per month). What would our offer price be at an 8 cap?
$3,412,500
IRR
Internal Rate of Return
Explain- Private equity structures (GP / LP, waterfalls, preferred return, funds, IRR, etc)
Three part answer:
What is APEX's Standard Contract Closing Timeline?
Days DD-
Days for Financing Period-
Days to Close-
45 Days Inspection, 80 Days Financing, 90 Days to Close
Small Bay Flex Property is 40,000 nrsf. Rents are $10 NNN. What is the QV?
$3,800,000