What is GPR in Commercial Real Estate?
GPR, or gross potential rent, is the maximum amount of rent money an owner or investor can expect to make from a property during a specific time period. Unlike a rent roll, which complies all current rents from a property, gross potential rent assumes 100% occupancy, so it can be calculated by taking by adding together the market rent of every unit in a project.
For example, a property with 15 units, each with a market rent of $4,000 a month, would have a monthly GPR of $60,000. In order to determine market rent, an investor should take a look at similar properties in the same area in order to make an accurate estimate. By doing this, the investor can get a good idea of a how profitable a property might be before they decide to purchase it.
In addition to looking at GPR and rent roll, investors may also want to look a projects TTM (trailing twelve months) and T3 (trailing three months) financial numbers in order to determine its profitability.