What are the main metrics when evaluating a commercial space? Assuming the IRR is above the discount rate... is it important to conduct an MIRR analysis on the property as well?
As an analyst at a firm, what are your main considerations?
Dec 28, 2020Dec 28, 2020
Real Estate Modeling Course
- Real-life RE Modeling Tests from actual Interviews
- Various asset classes including multi-family, commercial and more
- Huge discount - until more tests and cases added
Related Content
See moreTotal Avg Compensation
March 2021 Investment Banking
-
Director/MD (9) $911
-
Vice President (31) $349
-
Associates (163) $232
-
2nd Year Analyst (98) $151
-
Intern/Summer Associate (92) $144
-
3rd+ Year Analyst (23) $145
-
1st Year Analyst (370) $131
-
Intern/Summer Analyst (307) $82
Comments (3)
YOC, Basis, comps etc..
Sounds like you're just asking about return metrics so here are a few: IRR (unlevered and levered), net profit, equity multiple, cash-on-cash, yield-on-cost (stabilized).
I can't say I look at MIRR but we definitely run sensitivities.
Other deal specific metrics to evaluate the feasibility of an investment include: in-place and exit cap rate, discount to replacement cost on ($) value/unit or sf basis, debt yield (in-place and terminal). This also depends on the investment type (ground-up dev., redev., value-add, stabilized) but those are the ones that come to mind for a value add deal.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Want to Unlock by signing in with your social account?