Commercial and Residential Real Estate are not even remotely related. Commercial Real Estate involves a multitude of factors which are never considered in a transaction of a Residential home.

We have significant knowledge in South Florida Commercial Real Estate, and can expertly advice you on how to price your property, by evaluating data of similar recent sales to arrive at a CAP rate for the specific area.

To understand the basics for Commercial property valuation, the following financial details are used:

• Income - all gross revenue generated by the property
• Expenses – all the expenses other than debt service & capital expenditures
• NOI – Net Operating Income (Income minus expenses)
• Debt Service – Mortgage
• CADS - Cash After Debt Service (NOI minus Mortgage)

NOI is the most important number here, the higher the NOI, the more Cash after Debt Service that is available hence the more productive and valuable the property is considered.

Cap rate = Net Operating Income / Price a way to look at cap rate is as a return on money invested and assumptions can also be made as to risk, the calculation incorporates a property’s selling price, rents, non rental income, vacancy amount and operating expenses thus providing a reliable estimate of value.

If a seller and a buyer are interested in an income property, the seller is trying to get the highest price for the property or sell at the lowest Cap Rate possible.  The buyer is trying to purchase the property at the lowest price possible which translates into a higher Cap Rate.

Let us market your property, priced to sell right and to your highest benefit, you deserve nothing less!

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Michael Duenas, P.A
Broker-Associate, LCAM
Beachfront Realty, Inc.
18205 Biscayne Blvd ·  Suite 2205
Aventura, Florida 33160
Office: (305) 937·1717