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Commercial Real Estate News for Tuesday, April 11

Good morning, investors. In today’s real estate news—a simple overview of the retail market’s woes, a scammer couple reveal the flaws with the EB-5 program, and banks aren’t lending to apartment projects like they used to.

What in the World Is Causing the Retail Meltdown of 2017?

An easy-to-read explanation of the current problems facing the retail industry. The problems goes beyond Amazon’s relentless assault on brick-and-mortar.

Inside LA’s Deceptively Simple $50M EB-5 Scam

Victoria and Tat Chan scammed millions of dollars from foreign Chinese investors over the course of several years, transferring money from a fake development to a series of luxury homes for themselves. The situation isn’t as uncommon as it should be, and points to issues with the EB-5 program.

Multifamily Construction Loans Are Harder to Find

Banks are offering smaller loans than they once did to finance the development of multifamily properties. Banks face increased regulations that limit their risk-taking abilities. Financing can be found through other avenues though.

Commercial Real Estate News for Monday, April 10

Welcome back to the week, investors. In today’s commercial real estate news—a couple reports detailing retail properties and rental rates, as a well as a warning to the Federal Reserve about raising rates.

Take a Look at First Quarter Stats for Retail Real Estate

A short article covering Quantum Real Estate Advisors Inc’s findings regarding retail in the first quarter of 2017. In short, higher vacancies, higher rents, higher cap rates, and lower investment volume.

 Another report, this time from Trulia exploring rental rates around the US. As rents rise drastically in some of America’s largest cities, millenials (and others) may more often consider living with roommates. On average, roomies can save renters 13% or more of their monthly income.

The Fed’s in ‘no man’s land,’ Jim Cramer Warns

After a disappointing jobs report, the Fed should proceed cautiously with their plan to raise interest rates three times this year, warned Jim Cramer. The economy added only about half of the jobs that were expected, but unemployment fell from 4.7% to 4.5%.

Commercial Real Estate News for Monday, April 3

Welcome to the week, investors! In today’s commercial real estate news—data centers entice investors, US construction rises to heights unseen since 2006, and a mall bets big on Legos.

Data Centers Attracting Private Equity and Public Institutional Investors in 2017

In the first quarter of 2017, data center REITs have gained 10.41 percent on the FTSE NAREIT All Equity REITs Index. Likewise, public institution investors have gained interest.

U.S. Construction Spending Rises to Near 11-year High

US construction spending has increased to $1.9 trillion, the highest it’s been since 2006. The articles lays out further details covering which sectors contributed the most to growth.

 As mall owners struggle to entice shoppers to their stores, Plymouth Meeting Mall is betting big with a LegoLand addition. As customers increasingly turn to e-commerce, retail owners are looking to build experience for shoppers.

Commercial Real Estate News for Friday, Mar. 31

Happy Friday, investors! In today’s commercial real estate news, E-commerce may be making brick-and-mortar relevant again (bear with us on this), the apartment sector needs to blow off a little steam, and student housing is booming.

How E-commerce Is Making Stores Relevant Again

Traditional brick-and-mortar retailers may be able to fight off Amazon by using their local branches as arms against the online giant. Many customers order online then pick up their shipments from the physical stores, shaving time off delivery and allowing retailers the chance to sell them on more.

America is Building More Apartments Than Renters Want

Cool down on apartment investing, the market for them may be overheating a bit. Apartment occupancy slipped from 95.1% last year to 94.5% in the first quarter of this year. An increasingly healthy housing market may mean people are less interested in renting and more interesting in buying.

Economy Watch: Demand for Student Housing Stays Strong

While apartments slip, student housing remains strong.  Millennials are attending college in record numbers, increasing demand for high-quality roofs over their heads.

Commercial Real Estate News for Thursday, Mar. 30

Good morning, investors. In today’s commercial real estate news—Morgan Stanley predicts 2017 as the end of the bull market, a slim workforce slows down home building, and discover why investors are moving their money into emerging markets.

Morgan Stanley: The Bull Market in Commercial Real Estate is About to End

Analysts for Morgan Stanley expect 2017 to be the peak of this commercial real state cycle. They expect housing demand to surge in the coming years though as 70 million people enter the house-buying phase of their lives.

Homebuilders Struggle to Fill Jobs ‘Americans Don’t Want’

A slim workforce is slowing down home-building around the country. The average age of a construction worker is now 42, and more young men are attending college. The issue is compounded by the crackdown on immigrants, who make up as much as 25% of the construction workforce.

Five Reasons Why Investors Are Moving Capital Into Commercial Real Estate in Emerging Markets

Investors around the world are pouring money into the commercial real estate markets of emerging countries. This article explores some of the main drivers behind their motivation.

Commercial Real Estate News for Wednesday, Mar. 29

Good morning investors, in today’s commercial real estate news—the Vice Chairman of the Fed foresees two more rate hikes this year, retailers keep a wary eye on tourism numbers, and a small town debate on creative affordable housing.

Fed’s Fischer Says He Sees Two More Rate Hikes in 2017

Federal Reserve Vice Chairman Stanley Fischer said two more interest rate hikes this year will likely be “about right.” Fischer said the Fed is watching the Trump administration and will respond to whatever their economic plan is.

Retailers Could Get Slammed by Slowing International Tourism

The Trump administration’s attempts at a travel ban may be hurting more than just immigrants. Around the world, the US is becoming seen as inhospitable to foreign travelers. The slowing international tourism may negatively impact retailers who rely on the money rich travelers bring with them.

To Address Affordable Housing Shortage, Restoring 19th Century Homes

Wonderful piece from the New York Times covering unique solutions to affordable housing and the conflicts that can arise from them. Apalachicola, NY is well known for its historic houses, should they be renovated to provide lower income families with homes? The debate is causing a stir in the small town.

Commercial Real Estate News for Monday, Mar. 27

Welcome back to the week, investors. In today’s commercial real estate news—it’s all about amenities when it comes to student housing, Starbucks announces an aggressive expansion, and James Bullard would like to only see one interest rate hike this year.

Student Housing Developers Struggle to Provide the Right Amenities in Tight Spaces

There’s a war for student housing, and amenities are the weapons. Developers are learning to integrate the maximum number of popular amenities into tighter spaces. These, as well as a close distance to campus, signal strong future returns.

Starbucks in Hiring Spree Fueled by Continuing Store Expansion

Starbucks plans on opening over 15,000 stores in the US and abroad by the end of 2021. To fuel its aggressive expansion, the coffee giants plans on adding 100,000 younger employees to its workforce.

Fed’s Bullard Says He’s Okay With Another Rate Hike This Year

One rate hike by the Federal Reserve is “okay,” but any more is unnecessary right now, said St. Louis Federal Reserve Bank President James Bullard last Friday. He bases his stance on Trump’s incoming policies. He think it’s wise if the Fed waits to see how they impact the economy.

Commercial Real Estate News for Friday, Mar. 24

Happy Friday, investors! In today’s commercial real estate news—who’s to blame for the death of Sears, the hottest markets to invest in commercial real estate, and institutions look for ways to control commercial investments.

This is How You Destroy an American Icon

An American giant is dying, and the NYPost blames it all on CEO Eddie Lampert. Ten years ago the hedge fund billionaire bought Sears and merged it with KMart. Since then, investments in the stores’ upkeep has dwindled to where we are now.

Top 10 Markets for CRE Investment in 2017

This stage of the real estate cycle demands more precise investments. As such, investors should be heavily studying the markets before putting their money anywhere. NREOnline saves you a bit of time with the Top 10 commercial markets to invest in for 2017.

Hot US Real Estate a Potential Red Flag

It’s all great now, but a hot commercial market now could lead to a cold recession later. Eric Rosengren, president of the Boston Fed, urged financial institutions to look beyond just interest rates for solutions to keep the commercial market in check.


Commercial Real Estate News for Thursday, Mar. 23

Good morning, investors. In today’s commercial real estate news, Sears may be in bigger trouble than we all thought, Washington DC goes green, and Millennials forsake NYC and SF for more profitable pastures.

Sears Plummets After Citing ‘Substantial Doubt’ About Future

Sears is in hot water and their boat has sprung a leak. The 131 year old suffered stock shock after announcing “substantial doubt” about its ability to continue operating. Despite the cloudy future, Sears’ CEO promised to keep searching for solutions.

How Green is Greater Washington?

Washington DC has more LEED-certified buildings than any other city in the US. The capital has 117 green-buildings, 3% of the total certified buildings in America. LEED-certified buildings have rocketed in popularity over the course of the last several years.

Millennials Turn Their Back on New York and San Francisco

Salt Lake City, Miami and Orlando trump New York City and San Francisco as the cities millennials love to live in. Growing economies in the large cities offer opportunities for millennials to enter the workforce.

The Investment Property Valuation Calculator Tutorial

The Investment Property Valuation Calculator is a commercial investing calculator and an invaluable tool for investors and brokers alike. When used effectively, the IPV Calculator can help you plan ahead with your commercial property investments. An in-depth reading of the results can reveal when the best time to sell would be, areas where building expenses could be trimmed back, and many other insights that will create the best return on your commercial investment.

investment property valuation calculator

This is a basic tutorial that will introduce you to the IPV Calculator and some basic commercial real estate terms.

To begin valuing your investment property, visit

Step 1:

investment property valuation calculator

The IPV Calculator relies on a short, seven step process to supply you with a ten-year plan for your commercial property. To start, answer the question, “What type of investor are you?”

investment property valuation calculator

Are you looking to buy or sell your property?

Next, you’ll specify the Property Type of your building. If you’re unsure, you can learn more about the five general property types here.

investment property valuation calculator

Different commercial real estate property types require different information to give you an accurate reflection of their worth. So it’s important to specify the correct type! The expenses for a multifamily apartment will be very different than those of an office property. As will the type of lease you have established with the tenants.

That’s it for Step 1 of the IPV Calculator! Pretty simple. When you’re ready for Step 2, hit “Go to next step” to continue valuing your property in the commercial investing calculator.

investment property valuation calculator

Step 2:

The second step in the Investment Property Valuation Calculator is all about income! Here, you’ll discover how much Gross Income your property is bringing in. Gross Income is the total amount of money you are making, before deducting taxes and expenses.

It’s important to enter in as much data as you have on income, including individual tenant’s rent. The more information you can provide, the more in-depth analysis you’ll have of your property’s worth.

If you do not have the information readily available, or you have many, many tenants, you have the option to skip individual entries and enter the single lump sum of your building’s income.


Feel free to enter income number you most readily know. If you enter in your total monthly income, the commercial investing calculator will automatically calculate your annual income. This also works in reverse if you enter your annual income first.

Property Income refers to “income received by virtue of owning property.” The three forms of property income are rent—received from the ownership of natural resources; interest—received by virtue of owning financial assets; and profit—received from the ownership of capital equipment.

The Property Square Footage is the amount of space your property takes up. A square foot is defined as the area of a square with sides of 1 foot in length.

investment property valuation calculator

Vacancy Rate can be tricky. The vacancy rate refers to “the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time.” For example, if you have a four unit apartment, and a tenant moves out of one unit, your vacancy rate is 25%.

For the IPV Calculator, we recommend entering in the average property’s vacancy rate in your market. This number can swing drastically in different directions based on your property type and location, so expect to do some research. If you’re unsure, contact a local commercial real estate broker. They will be happy to help you out!

When you’ve entered all the figures you can, hit “Go to next step” to continue valuing your property with the commercial investing calculator.

investment property valuation calculator

Step 3:

investment property valuation calculator

In Step 3, you’ll break down the expenses it takes to run and maintain your property. This will provide you with a better idea of how much each charge is cutting into your profit and where you could potentially save money.

investment property valuation calculator

There are typically two types of leases when dealing with commercial real estate, Gross Lease and Triple Net Lease (NNN). If a Triple Net Lease has been signed, the tenant agrees to take on the full extent of the building’s expenses. They will cover taxes, insurance, maintenance and nearly every billable item.

With a Gross Lease, it is the landlord who is responsible for paying the majority of the building’s expenses. The tenants pay a singular rate throughout the year.

Click here to learn more about the two types of leases.

investment property valuation calculator

As with income, we recommend you fill put as many details as possible into the commercial investing calculator for your building’s expenses. Every expense you input will lead to a more comprehensive view of your property and allow you to more strategically outline your future plans for it.

The Investment Property Valuation Calculator automatically creates fields for some of the most common expenses, but you are free to create delete or create your own depending on your property’s unique needs.

investment property valuation calculator

If you are unsure of your property’s various expenses, there is the option to enter the total lump sum of your building’s cost. This will result in a less detailed, but still functional final report.

investment property valuation calculator

When you’ve entered all the expenses you know, hit “Go to next step” to continue valuing your property with the commercial investing calculator.
investment property valuation calculator


Step 4:

investment property valuation calculator commercial investing calculator

In Step 4 of the IPV Calculator, you’ll focus on valuing your commercial real estate property. You’ll advance from this step with a better understanding of what your building is worth and an estimation of its Cap Rate.

investment property valuation calculator

Before you begin, it’s useful to understand a couple terms. First Net Operating Income (or NOI) is a calculation used to determine the profitability of a property. NOI is determined by adding all revenue generated from the property (rent, parking, etc) minus all reasonably necessary operating expenses (insurance, repairs, etc.)

investment property valuation calculator

A Capitalization (Cap) Rate is a little more complicated to figure out. A cap rate is the rate of return anticipated for one year if the property was paid for in cash — it’s the ratio between the NOI and the property value. It is determined by evaluating the financial data of similar properties which have recently sold in a specific market. The cap rate calculation incorporates a property’s selling price, gross rents, non rental income, vacancy amount and operating expenses.

Generally, buyers are interested in properties with a higher cap rate, while sellers want their cap rate to be low. You can use the slider at the bottom of the page to see how the cap rate affects the value of your property. As the cap rate goes up, your property’s value goes down.

If you’d like to learn more about cap rates, read out article for a more comprehensive explanation. Alternatively, use MyNOI’s Local Cap Rate tool to get an idea of what the cap rates may be in your area.

When you’ve entered all the values you can, hit “Go to next step” to continue valuing your property in the commercial investing calculator.

investment property valuation calculator


Step 5:

investmenr property valuation calculator commercial investing calculator

In Step 5 of the IPV Calculator, we’ll perform a financial analysis and take a look at the debt you’ll be incurring by investing in a commercial property.

investmenr property valuation calculator

The first information you’ll be asked for is the down payment and loan amount.

The down payment is the amount of money a buyer needs to pay up front before they can sign the building contract. Most property owners expect some form of down payment as a way to prove buyers have the capital to afford making monthly mortgage payments. The loan amount is simply how much money you’ll be borrowing to purchase the property.

After the down payment and loan amount, you’ll fill in information on Interest Rate, Amortization Period, and Monthly Payment.

The interest rate is the percent charged for borrowing assets. If the bank loaned you money, they make a profit from it by charging you an interest rate based on the total still owed.

An amortization period is the amount of time it will take you pay off the debt with fixed monthly installments. The calculator will then crunch your expected monthly payments based off the total loan and how long you will be paying it off. The finished Investment Property Valuation Calculator report will detail how much you will have left to pay off every month.

The final slots for Step 5, Annual Debt Service and Debt Coverage Ratio (DCR), are automatically calculated for you if all the above information has been filled out.

investmenr property valuation calculator

Your annual debt service is simply how much money you will need to generate yearly to cover both your repayment loans and the interest on top of them. The debt coverage ratio is determined by dividing the NOI by the debt service. Or to put it simply, how much you’ll be making by how much you’ll owe. Typically, a bank with require a DCR of 1%> before loaning you any money, as that signifies your property will generate a positive cash flow.

When you’ve entered all the values you can, hit “Go to next step” to continue valuing your property in the commercial investing calculator.

investment property valuation calculator

Step 6:

How to Use the Investment Property Valuation Calculator commercial investing calculator

In the sixth step, investors will examine the cash flow of their property. It’s a short step that asks buyers to enter or estimate the average percentage growth of their income and expenses in order to help you better understand the long-term health of your property.

How to Use the Investment Property Valuation Calculator

Step 6 is the final section before your ten-year report is calculated by the commercial investing calculator. In this phase, we’ll focus on the estimated annual growth of your income and expenses.

investment property valuation calculator

As time goes on, it’s likely the income and expenses your building generates will grow. To ensure you receive an accurate ten-year forecast, it’s necessary to know how much each will be growing by. Enter the best estimation of growth you have into the proper boxes. If you’re unsure of what the rate may look like, contact a local broker and ask for the numbers on similar properties in the same sector and area.

The Cap Rate at Sale box will automatically populate itself based on the information you’ve given in previous sections. If you need a reminder of what cap rate is, read our article.

When you’ve entered all the values you can, hit “Go to next step” to see your ten-year property forecast report.


investment property valuation calculator

Step 7:

Investment Property Valuation Calculator commercial investing calculator

The final step of the IPV Calculator is a summation of everything you’ve entered before. Investors can see a ten-year forecast of their commercial property, along with information on their loans. This handy report can act as a loose guide on investments and provide you with a direction concerning where to put your money.

Investment Property Valuation Calculator

You’re familiar with many of these terms already from previous steps, but we’ll detail some of the new ones you may not recognize.

The Net Cash Flow is the money that remains after expenses and loan repayments have been taken out of your revenue.

Cash on Cash Return is a common way in the real estate industry of looking at your returns. It is calculated by dividing your cash flow by the amount of your total investment.

Principal Reduction is the amount of money you will have paid off that year toward your loan. With Cumulative Principal Reduction showing you the total sum of your payments so far.

The final report also lists how your loan payments will play out over the entire amortization period. Each month is detailed with how much you will be paying, the interest you’re paying on it, and the cumulative payments made so far.

Investment Property Valuation Calculator

To receive a PDF of the final report, click the “Email Me Results” and enter your email address.

From this final step, you can go back and edit any of the previous numbers you put in to see how they may affect the outcome of your property. Try lowering the interest rate to see how much .2% could save you over 30 years. Or experiment with rent prices to find the happiest medium between satisfied tenants and sufficient cash flow.

Thank you for your interest in the IPV Calculator. We hope you find it useful for all your commercial real estate needs!

To learn more about the team behind the commercial investing calculator, visit

Download the commercial investing calculator tutorial.