{"id":131,"date":"2020-11-02T15:26:32","date_gmt":"2020-11-02T15:26:32","guid":{"rendered":"http:\/\/cohencommercial.com\/wordpress\/?p=131"},"modified":"2022-05-18T15:36:01","modified_gmt":"2022-05-18T15:36:01","slug":"10-commercial-estate-acronyms-you-should-know","status":"publish","type":"post","link":"https:\/\/cohencommercial.com\/wordpress\/?p=131","title":{"rendered":"10 Commercial Estate Acronyms You Should Know"},"content":{"rendered":"\n
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If you are planning to invest in commercial real estate, there are a few terms you absolutely must know before you begin. These terms – and their acronyms – are at the heart of every commercial real estate investment you will come across. The following is a compilation of some of the most used commercial real estate terms and their acronyms.<\/p>\n\n\n\n

ROI \u2013 Return on Investment<\/strong>. ROI is the ratio which measure net profit versus the cost of the investment. The higher the ROI, the more profit you are making.<\/p>\n\n\n\n

LOI \u2013 Letter of Intent.<\/strong> LOI is an acronym for letter of intent, which is a document expressing the intent of each party in a real estate agreement. It is not a legal binding contract, but helps to avoid misunderstandings between both sides.<\/p>\n\n\n\n

CAM \u2013 Common Area Maintenance. <\/strong>CAM charges are the charges paid by the tenant for the upkeep of the property for use and benefit of all the tenants.<\/p>\n\n\n\n

LTV \u2013 Loan-to-Value. <\/strong>LTV is a ratio used to asses lending risk that financial institutions and other lenders use to approve a mortgage. Loans assessed to have a high LTV are considered higher risk and therefore have a higher interested rate on the mortgage loan.<\/p>\n\n\n\n

DCR \u2013 Debt Coverage Ratio. <\/strong>DCR measures the ability to pay the property\u2019s monthly mortgage payments from the cash generated from renting the property.<\/p>\n\n\n\n

NNN Lease \u2013 Triple Net Lease. <\/strong>A NNN lease is when the tenant typically pays a base rent plus an additional amount for property tax, insurance and maintenance costs.<\/p>\n\n\n\n

NOI \u2013 Net Operating Income. <\/strong>NOI equals all revenue from the property, minus all reasonably necessary operation expenses. NOI is used to calculate the profitability of income-generating real estate investments.<\/p>\n\n\n\n

USF \u2013 Usable Square Footage. <\/strong>USF is space you can actually occupy. Generally, hallways, stairways, bathrooms and storage rooms are not calculated in USF. However, if you rent an entire floor, then these areas may be included.<\/p>\n\n\n\n

CMA \u2013 Comparative Market Analysis. <\/strong>CMA is the process of determining an investment property\u2019s value by comparing it to other properties similar in size and amenities.<\/p>\n\n\n\n

REIT \u2013 Real Estate Investment Trust. <\/strong>A REIT is a company who finances, owns, manages and operates income-producing investment properties.<\/p>\n\n\n\n

About Cohen Commercial Realty, Inc.<\/strong><\/p>\n\n\n\n

Cohen Commercial Realty, Inc., is a full-service commercial real estate brokerage firm dedicated to fulfilling client needs quickly and efficiently throughout the South Florida market and beyond. Our property management team combines knowledge of the market and client needs with expert marketing, research and specialization. This is the reason so many owners and investors choose Cohen Commercial to handle their commercial real estate transactions. Contact Cohen Commercial today! http:\/\/www.cohencommercial.com\/index.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

If you are planning to invest in commercial real estate, there are a few terms you absolutely must know before you begin. These terms – and their acronyms – are at the heart of every commercial real estate investment you will come across. The following is a compilation of some of the most used commercial … <\/p>\n

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