Condensed Chapter 23 Slides

Condensed Chapter 23 Slides - Chapter 23 Commercial...

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“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner Chapter 23 Commercial Brokerage and Leasing
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“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner Major Topics Commercial Brokerage Functions Lease analysis from the tenants perspective Lease analysis from the landlords perspective Influences on effective rent Cash flow analysis and buyer/seller perspectives on proforma assumptions Cap Rate influences Before and after tax cash flow and resale analysis
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“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner Introduction and Overview Commercial brokers on average have far more training than residential brokers and tend to earn far higher earnings Good commercial agents will have a great deal of general business knowledge and tend to specialize by property type within a given market region Specializations may include office, retail, multifamily, industrial, agricultural or even recreational property
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“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner The Building Block of Investment Value Begin With the Tenant and Lease While in residential brokerage the qualitative factors may dominate value, but within the commercial brokerage industry it is the financial terms that dominate views on value The value of a building is primarily the summed value of the net productivity of leased space, as now constrained by lease contracts and as affected by operating expenses, market trends and longer term prospects
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Economy”: Norman G. Miller and David M. Geltner Investment Value (Contd.) LPV = Lease Present Value For the landlord, the appropriate discount rate, k, is based on the potential yield for similar risk
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This note was uploaded on 02/07/2012 for the course FIN 4380 taught by Professor Staff during the Spring '08 term at Texas State.

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Condensed Chapter 23 Slides - Chapter 23 Commercial...

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