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Terms in this set (31)
What are the four basic 1 - Potential rental income (PRI)
components of NOI? 2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a Lease analysis
property's PRI (Potential Rental
Income.)
PRI equals NOI in what If the property has one tenant with a long-term
property/tenant scenario? absolute NNN lease.
[XXXX] is PRI minus vacancy and ERI (Effective Rental Income)
collection losses.
Name some items which are Interest and principal on debt on the property
EXCLUDED from Operating Depreciation (cost recovery)
Expenses. Capital Expenditures
Income Taxes
Reserves for Replacement
Tenant Improvements
, True or False: Depreciation is False
included in Operating Expenses.
True of False: Principal and interest False. This is an expense of ownership, not an
on debt financing is included in operating expense.
Operating Expenses
True or False: Capital Expenditures False. They are written off over a period of years.
are included in Operating
Expenses.
True of False: Income Taxes are False
included in Operating Expenses
True of False: Reserves for False
Replacement are included in
Operating Expenses
True of False: Tenant Improvements False
(TI) are included in Operating
Expenses
True of False: Repairs and True
Maintenance are included in
Operating Expenses
True of False: Property insurance is True
included in Operating Expenses
True of False: Utilities are included True
in Operating Expenses
What's the biggest difference Cap rate does not factor in eventual sale
between cap rate and yield? proceeds - yield does. If there is a profit on the
sale then yield will be higher than cap rate.