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9 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is Cap Rate and how is it calculated?
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The cap rate is the rate at which future cash flows are converted to a present value.
Cap Rate = Annual Net Operating Income / Cost (Purchase Price) |
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What is the Debt Coverage Ratio (DCR) and how is it calculated?
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The Debt Coverage Ratio (DCR) is normally used in evaluating an entity's ability to fulfill its debt obligation.
DCR = Net Operating Income / Annual Mortgage Payment |
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What is Effective Gross Income?
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EGI is the expected annual rental income to be collected after adjusting for vacancies & reserves for uncollected rents.
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What are Funds from Operations and how is it calculated?
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- FFO is commonly used by REITS to measure cash flow from an entity.
- Also used as a measure of operating effectiveness of a REIT & regarded as a better measure of performance than earnings. |
Calculated as
Net Income + Depreciation + Amortization - Gain from sales of RE |
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What is Gross Building Area?
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GBA is the total area of all floors measured from the exterior of the building & including superstructure and the substructure basement.
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What is Gross Rentable Area?
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GBR is the total floor area intended for tenant occupancy and use. Basements, hallways, and stairways are included in this area.
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What is Net Operating Income?
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NOI is the amount left after deducting operating expenses from Gross Income.
- It does not include depreciation, amortization, or debt service payments. - NOI is widely used a performance indicator for profitability. |
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What is Net Rentable Area?
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NRA is the amount of space rented to a lessee, excluding the common areas of a property.
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What is retainage?
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In a construction project, retainage represents a portion of the amount due under a construction contract that has not been paid by the owner to the contractor pending completion of the project in accordance with plans & specifications.
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