T3: Trailing Three Months in Commercial Real Estate

What is T3 in Commercial Real Estate? 

T3, or trailing three months, is measurement of a commercial real estate project's finances for the last 3 months. T3 can be a great tool for investors, since it looks at a project's most recent profitability. This is especially helpful if rents or occupancy numbers have recently changed. 

How is T3 Calculated 

T3 for income statements or cash flow statements can easily be calculated by looking at the last quarter's documents. Or, if these statements are available monthly, by looking at the last three months. However, balance sheet information, can simply be taken as is, because it represents an up-to-date snapshot of a project's assets, liability, and owner's/investor's equity.

Investors who want a slightly longer term look at a property's potential profitability should look at its TTM, or trailing twelve months. TTM represents the project's finances over a longer, twelve month period. Plus, investors might also want to check out a property's rent roll, a record of the current rental income that a commercial property generates. They may also want to know a property's GPM, or gross potential rent, which is the potential rental income of a property at 100% occupancy. 

To learn more, speak with a commercial real estate loan specialist today.