A Freshman’s Guide to Commercial Real Estate Analysis: Welcome to RESHEETS U

As a new member of the Commercial Real Estate industry, you might find the analytics / financials overwhelming, so we’ve developed a freshman course, and for those long-time veterans, we promise not to tell as you wipe the rust away.

We’re here to make it easy… so sharpen your pencils, master the finances, talk the senior-year A-game we know you’re capable of, and please, no cell phones.

Let’s get started.

Your success in the Commercial Real Estate industry relies heavily in part on your fundamental understandings of analysis. Your “people-person” is not enough. It’s far easier being a salesman if you’ve got something substantial to sell. And since in this case, as is most cases, we’re selling ourselves, we need to develop ourselves into a little of financial everything.

If you can master the following commercial real estate analysis tools better than your peers and attach a complementary skill (personality, delivery, trust, suave, golf… if you must), you could be well on your way to a long and successful career.

If all goes well, you might want to consider owning an NFL TEAM (cue first shameless blog plug!)

So please take out your calculators*, class is now in session.

Finance 101

Cap Rate
Gross Rent Multiplier
Cash on Cash
Debt Service Coverage Ratio

Finance 201

Positive vs. Negative Leverage
Time Value of Money
Discount Rates
Present Value
Future Value

Finance 301

Net Present Value / Present Value Discounting
Internal Rate of Return

*calculator not required