EGI: Effective Gross Income
Effective gross income, or EGI, is a forecast of an asset’s income. It isn’t strictly limited to rental payments - any other revenue-generating services at a…
commercial property underwriting
Everything tagged commercial property underwriting in the Commercial Real Estate Glossary.
Articles
Understanding Personal Guarantees on Commercial Mortgages
A personal guarantee pledges the private assets of an individual borrower to secure a commercial mortgage.
Internal Rate Of Return (IRR) Calculator & Usage
An internal rate of return (IRR) is a calculation investors use to determine the likely rate of growth of capital (as it relates to both time and yield) for a…
What Is Defeasance?
Defeasance is a strategy that permits repayment of a commercial property loan on a property, to facilitate sale or refinance.
The Importance of Debt Yield in Commercial Property Loans
Debt yield is a measure of risk for commercial mortgage lenders. It takes into account the net operating income of a commercial property to determine how…
Capitalization Rates (Cap Rates) in Commercial Real Estate
The capitalization rate, or cap rate, is calculated by dividing the net operating income of a property by its market value. This is the key tool appraisers use…
DSCR: Debt Service Coverage Ratio
Debt service coverage ratio or DSCR, is a comparison between net operating income and debt service on an annual basis and is generally one of the most…
Soft Step Down In Commercial Property Loans
A step down requires the payment of a set percentage of the outstanding amount of the loan. That percentage declines as the loan ages. While a typical step…
Step-Down Prepayment Penalties on Commercial Property Loans
It is called a step-down penalty because the amount gets smaller the longer the loan is in place. For example, a typical step-down might be 5% of the…
Defining Yield Maintenance In Commercial Mortgages
Yield maintenance is a prepayment penalty on an existing commercial mortgage. It acts as a guarantee for the commercial property lender who made the original…
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