Resources
Every CRE financial metric — from NOI and cap rate to DSCR and IRR — is only as accurate as the underlying lease and financial data. These guides explain each metric and show why precise lease abstraction and financial spreading matter for accurate analysis.
Financial Metrics
Financial Metric
BOV vs Appraisal: Who Prepares Each, What They Cost, and When Only One Will Do
A BOV is a broker's opinion; an appraisal is a licensed, standards-governed valuation. The differences that matter — who signs it, what governs it, and which decisions each one can carry.
Financial Metric
Broker Opinion of Value (BOV): What It Is and What Belongs In One
A broker opinion of value is a broker's estimate of what a property would sell for. What a BOV contains, when it is the right instrument, and where it stops — with the section-by-section anatomy.
Formula: NOI ÷ Property Value
Capitalization Rate (Cap Rate) in Commercial Real Estate
Capitalization Rate (Cap Rate) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves cap rate analysis.
Formula: Annual Pre-Tax Cash Flow ÷ Total Cash Invested
Cash-on-Cash Return in Commercial Real Estate
Cash-on-Cash Return in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves cash on cash return analysis.
Formula: NOI ÷ Annual Debt Service
Debt Service Coverage Ratio (DSCR) in Commercial Real Estate
Debt Service Coverage Ratio (DSCR) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves dscr commercial real estate analysis.
Formula: GPR + Other Income − Vacancy Loss
Effective Gross Income (EGI) in Commercial Real Estate
Effective Gross Income (EGI) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves effective gross income analysis.
Financial Metric
Gross Potential Rent (GPR): Formula, and Why It Comes From the Rent Roll
Gross potential rent is every unit at its asking rent, whether or not it is leased. The formula, how it differs from scheduled rent, and why a T-12 cannot tell you what it is.
Formula: Property Price ÷ Gross Annual Rent
Gross Rent Multiplier (GRM) in Commercial Real Estate
Gross Rent Multiplier (GRM) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves gross rent multiplier analysis.
Formula: NPV = 0 (solve for r)
Internal Rate of Return (IRR) in Commercial Real Estate
Internal Rate of Return (IRR) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves internal rate of return analysis.
Formula: Loan Amount ÷ Property Value
Loan-to-Value Ratio (LTV) in Commercial Real Estate
Loan-to-Value Ratio (LTV) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves loan to value ratio analysis.
Financial Metric
Loss to Lease in Commercial Real Estate: Formula, Example and the Vacancy Trap
Loss to lease is the gap between gross potential rent and what in-place leases actually command. The formula, a worked example, and why charging vacancy on GPR deducts the same gap twice.
Formula: EGI − Operating Expenses
Net Operating Income (NOI) in Commercial Real Estate
Net Operating Income (NOI) in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves net operating income analysis.
Formula: Total Occupancy Cost ÷ Tenant Gross Sales
Occupancy Cost Ratio in Commercial Real Estate
Occupancy Cost Ratio in Commercial Real Estate — learn the formula, calculation method, common mistakes, and how accurate lease data improves occupancy cost ratio analysis.
Formula: Σ (Remaining Term × Lease Value) ÷ Total Portfolio Value
Weighted Average Lease Term (WALT): Formula, Worked Example and the As-Of Date Trap
WALT is the rent-weighted average remaining lease term. The formula, a worked example, what to exclude, and why measuring from today instead of the rent roll's as-of date silently shortens it.
Accurate Data, Better Calculations
Crevanta extracts the underlying lease and financial data that feeds into CRE metrics — ensuring accuracy and consistency across your portfolio.