CRE Glossary

A property's annual return as a percentage of its sale price. Formula: Cap Rate = NOI ÷ Sale Price. A 6% cap means $6 of NOI for every $100 of price.

Lower cap rate = higher price (and usually safer asset). Retail trades 6-8%, multifamily 5-7%, industrial 6-8%.

A multi-year (typically 5-10 year) model of the property's income, expenses, NOI, debt service, and cash flow — used to underwrite the deal.

The Multi-Year Cash Flow rent roll type generates this projection. Pick it when growth assumptions matter.

Annual cash flow (after debt service) divided by equity invested. Shows the actual yield on the cash the buyer puts in, not on the full property price.

Only calculated when loan assumptions (loan amount, rate, amortization) are entered on the Valuation step.

NOI divided by annual debt service (principal + interest). Lenders typically require 1.20x-1.30x DSCR on a CRE loan — meaning NOI covers debt payments with 20-30% cushion. Below 1.0x means the property doesn't generate enough cash to cover its loan.

CREBuilder calculates DSCR on the multi-year cash flow projection when loan assumptions are entered on the Valuation step.

Gross potential income MINUS vacancy and credit loss, PLUS other income (parking, laundry, etc.). The actual top-line revenue used to calculate NOI.

Total cash returned to the equity investor divided by their equity invested. A 2.0x equity multiple means the investor doubled their money over the hold.

Pairs with IRR as the headline return metric. Calculated from cash flow + exit assumptions.

The assumed cap rate when the property is sold at the end of the hold period. Used to calculate the projected exit price (Exit Year NOI ÷ Exit Cap Rate). Always set HIGHER than the going-in cap to reflect aging, market risk, and buyer's underwriting cushion.

Set in the Assumptions panel on the Valuation step. Industry convention: Going-In Cap + 50-100 bps for stabilized assets; +100-200 bps for value-add.

The cap rate at acquisition — Year 1 in-place NOI divided by the sale price. The headline cap rate that gets quoted on a deal.

Distinguishable from Exit Cap (the assumed cap rate at sale, used for return projections). Going-In cap usually compresses by 50-150bps to Exit Cap in stabilized underwriting.

Total annual rent if every unit/space were 100% leased at full asking rents. CREBuilder calculates this from your rent roll and vacant unit projections.

The property's CURRENT income, rents, or NOI — what's actually being collected today, before any planned increases or lease-up.

On the rent roll, in-place rents are the contract rents on existing leases. CREBuilder shows in-place vs pro-forma side-by-side when you pick the Pro Forma type.

The annualized return on a property over the full hold period, accounting for both annual cash flows and the eventual sale proceeds. Institutional buyers underwrite to a target IRR (often 10-20%).

CREBuilder calculates IRR from the multi-year cash flow projection + exit assumptions on the Valuation step.

Total income from the property minus operating expenses — but BEFORE debt payments, taxes on profit, and depreciation. The single number that drives valuation.

CREBuilder calculates NOI automatically from your rent roll + expenses. "In-place NOI" is Year 1; "stabilized" or "pro forma" NOI is the projected number.

"Pro forma" rents/income/NOI are the PROJECTED stabilized numbers — what the property should produce once vacancies are leased and below-market rents are bumped. "In-place" is what it produces today.

Pick the Pro Forma rent roll type when you want to show buyers a side-by-side of current vs. potential. Cash Flow type shows multi-year growth projections instead.

A property at its long-term occupancy and rent level — vacant units leased, below-market rents bumped, lease-up incentives burned off. The point where in-place income equals pro forma income.

Pro forma NOI represents stabilized performance. The gap between in-place and stabilized is the value-add upside.

The actual operating statement for the past 12 months — income and expenses by line item. The most reliable view of true property performance because it's audited reality, not projection.

Every buyer's analyst asks for a T-12 during due diligence. Capture the T-12 numbers on the Income & Expenses step to drive an accurate NOI.

Income deducted from GPI to account for empty units, tenant turnover, and uncollectible rent. Usually 3-10% depending on asset class.

Set as a percentage assumption on the Valuation step.

The large, well-known tenant that draws foot traffic to a retail center (e.g., a grocery store at a strip center, a Target at a power center). Anchor presence drives the value of the whole center.

Shared property expenses (landscaping, parking lot upkeep, common-area utilities) that NNN tenants reimburse the landlord for.

"CAM Reimbursements" on the Income & Expenses step is the tenant payback for these costs.

Landlord giveaways to win a lease — free rent months, expanded TI, reduced parking charges, signage allowance, moving allowance. Reduces effective rent below face rent.

In CREBuilder, capture concession structure in the Tenant tenantNotes field. Buyers will discount face rents if concession patterns aren't clear.

A tenant with a publicly-rated investment-grade credit (e.g., Walmart, Costco, Home Depot, federal government). Their leases trade at lower cap rates because rent collection is essentially guaranteed. Note: credit ratings change — Walgreens, for example, was downgraded to non-investment-grade in 2024.

List the credit rating on the Tenant Profiles step. Highlight credit tenants in the Investment Highlights narrative.

A lease where the landlord pays ALL operating expenses (taxes, insurance, CAM, utilities) out of base rent. Common in Class A office. Tenants like the simplicity; landlords bear inflation risk.

A lease where the tenant pays one fixed rent and the landlord covers all operating expenses. Common in multifamily.

A long-term (30-99 year) lease of the LAND only — the tenant builds and owns the improvements on top of it. Common for ground-up retail (e.g., a Starbucks pad on a shopping center's parcel).

The gap between in-place rents (what current tenants pay) and market rents (what a new tenant would pay today). Positive loss to lease = upside; negative = property is renting above market and may face turnover pressure.

Pro Forma rent roll mode surfaces this directly — in-place column vs pro-forma column. The bigger the gap, the bigger the value-add story.

A lease where the tenant pays base rent + their share of SOME expenses (typically utilities or CAM) but the landlord covers others (typically taxes and insurance). Common in office.

A lease where the tenant pays the three "nets": property taxes, insurance, and maintenance (CAM) — on top of base rent. The landlord receives clean income with minimal expense.

Common on single-tenant retail and some multi-tenant retail. NNN rent rolls have a separate expense reimbursement column.

TI = landlord-funded buildout for a new tenant (or renewal). LC = the broker commission paid to lease the space. Both are cash-out costs that reduce real returns and are usually expressed in $/SF.

Set in the Reserves section on the Valuation step. Typical: Office $25-75/SF TI plus 4-6% LC; Retail $10-50/SF TI plus 4-6% LC; Industrial $5-20/SF TI plus 3-5% LC.

The SF-weighted average years remaining on all the property's leases. The single most-asked metric for multi-tenant retail and NNN portfolios — longer WALT = more income certainty.

CREBuilder weights by square footage (the standard convention for multi-tenant retail and office). Buyers ask for WALT on every multi-tenant or single-tenant net-lease deal — capture lease end dates on every tenant for an accurate calculation.

Average revenue per occupied hotel room per night. Total room revenue ÷ rooms sold.

Captured per room category in the Hospitality rent roll. ADR × occupancy × room count × 365 = annual room revenue.

The county tax assessor's unique ID for a parcel of land. Different states use different formats: California uses APN, Texas uses Geographic ID, Hawaii uses TMK.

For land assemblages, list every parcel's ID on the Property Data step.

Total rentable square footage of a property — excludes lobbies, common areas, and unleasable utility space. The denominator for occupancy and rent calculations on multi-tenant retail and office.

The use of a property that produces the maximum value, subject to what's legally allowed, physically possible, and financially feasible. For raw land deals and assemblages, HBU analysis is the heart of the underwriting.

For land assemblages, document current zoning, allowable use, and proposed HBU in your Property Overview narrative.

Sale price divided by hotel room count ("key" = hotel room). Primary metric for hospitality deals.

Sale price divided by total unit count. The primary valuation metric for multifamily and self-storage (where SF varies by unit type).

A hotel's revenue performance regardless of occupancy. Formula: RevPAR = ADR × Occupancy. The benchmark metric for hospitality.

Total building square footage. Price/SF (sale price ÷ building SF) is the primary valuation metric for retail, office, and industrial. For example, a 10,000 SF building at $2.5M is $250/SF.

A formal valuation deliverable — low/mid/high estimate, sales and rental comparables, market analysis, broker credentials. Used for listing pitches, seller education, and internal hold/sell decisions. NOT used for loan sizing — that requires a licensed appraisal.

Your firm's branded, embeddable index of all your active listings. One URL, one iframe snippet — drop it on your firm's website and every new listing appears automatically. Aggregates across all of your CREBuilder documents.

The full investment-sales marketing document — financials, rent roll, market data, photography, comps. 17-25+ pages. The gold standard for serious institutional and high-net-worth listings.

A public-facing web page for one specific property — photos, video, key facts, contact form. Generated automatically from your CREBuilder document and shareable as a single URL.

A concise ~7-page deal summary — property overview, key financials, hero photos, contact info. Sent first to gauge buyer interest before sharing the full OM.

A like-kind property exchange under IRC Section 1031 that defers capital gains tax — sell one investment property and reinvest the proceeds in another within strict deadlines (45 days to identify, 180 days to close). Massive transaction volume in CRE comes from 1031 buyers chasing replacement assets.

For a portfolio sale where one or more buildings will be a 1031 buyer's "replacement," override the default NOI-proportional Allocated Value with an appraisal-based or basis-allocation override.

On a portfolio sale, how the total selling price is distributed across the individual properties. By default CREBuilder allocates proportionally to each building's NOI; for 1031 exchanges or lender requirements you may override.

Multiple buildings on the same physical site, sold as one asset — corporate office park, apartment complex, mixed-use development. Document uses one master address; the cover shows the campus name.

Multiple contiguous parcels with separate APNs sold together as one development opportunity. Value usually comes from rezoning potential and combined size, not the sum of individual parcels.

Scattered properties sold together — three shopping centers across a metro, multi-state holdings. Each property carries its own address on the cover and listing.

Portfolio-level cap rate: sum of every building's NOI divided by the total selling price. The right way to compare a portfolio's yield to a single-property's cap rate.

CREBuilder calls this "Weighted Average Cap Rate" or "Blended Cap Rate" on portfolio docs. It appears on the cover, exec summary, and valuation summary.