Analysis exists to answer one question: is this property worth buying, holding, lending on or leasing at the terms proposed? Every number you calculate serves that decision.
The four main property types
Office, retail, industrial and multifamily, plus specialty sectors such as hotels, self-storage, medical office and data centers. Each has its own lease structures, expense patterns and risk profile.
Who does analysis
Acquisitions analysts, asset managers, lenders, appraisers, brokers and investors. Same math, different priorities: a lender cares most about downside coverage; an investor about upside returns.
Inputs and outputs
Inputs are the rent roll, operating history, market data, debt terms and assumptions. Outputs are net operating income, value, returns and a risk assessment.
Common mistake
Starting in a spreadsheet before understanding the property. The best analysts walk the asset and read the leases before building a model.
Key Takeaways
- Office, retail, industrial and multifamily, plus specialty sectors such as hotels, self-storage, medical office and data centers.
- Acquisitions analysts, asset managers, lenders, appraisers, brokers and investors.
- Inputs are the rent roll, operating history, market data, debt terms and assumptions.
Check Your Understanding
Before moving on, explain in your own words how the ideas in “What Commercial Real Estate Analysis Is For” apply to a property or deal you know, and name one number or document you would need to check.
Action Step
Pick one commercial property listing online. Write down its type, size, asking price, and the three things you would need to know before valuing it.
This course is educational and does not provide legal, tax, financial, investment or appraisal advice, and does not issue any license, certification or credential. Real estate law, tax rules and licensing requirements vary by state and change over time; consult a licensed attorney, CPA, appraiser or your state regulator for your situation.