The Absorption Rate is an estimate of the expected annual sales or new occupancy of a particular type of land use, providing a measurement of how quickly available real estate inventory is being sold or leased.
The Average Rate of Return (ARR) is a metric used to evaluate the profitability of an investment, calculated by dividing the total net earnings by the number of years the investment was held, and then dividing by the initial acquisition cost.
Building Efficiency Ratio signifies the proportion of a building's usable floor area as compared to its total area. It is a crucial metric used to determine the efficiency of a building’s design and its space utilization.
The building/land ratio is a real estate metric that compares the value of improvements (like buildings) on a piece of land to the value of the land itself. This ratio helps investors and appraisers assess the value and utility of a property.
Capture rate is a key metric in real estate that measures the sales or leasing rate of a particular development compared to all developments in the market area. This rate helps developers and investors gauge the market performance of a specific project within a competitive landscape.
A measure of annual cash return on the amount of cash invested in a property, often used to evaluate the performance of income-generating real estate.
Economic Occupancy refers to the effective occupancy rate of property units based on units rented for money, rather than the physical occupancy, which simply counts the number of occupied units regardless of whether rent is being paid.
The efficiency ratio in real estate is the proportion of a building's area that is leasable space, reflecting how efficiently space within the building is utilized for leasing purposes.
The Expense Ratio is a financial metric used to compare the operating expenses of a property to its potential gross income, allowing investors and property managers to analyze the relative operating efficiency.
The Gross Rent Multiplier (GRM) is a simplified ratio used by real estate investors to evaluate the potential profitability of an income-generating property. It is calculated by dividing the property's purchase price by its gross annual rental income.
Homeownership rate represents the percentage of owner-occupied dwellings compared to the total occupied dwellings in a specific area, providing insight into housing stability and economic activity.
The Improvement Ratio measures the relative value of improvements on a property compared to its unimproved value, providing insight into the investment in enhancements versus the land value itself.
Market Capture, also known as Capture Rate, is a vital real estate metric that measures the share of a particular property or set of properties in relation to the overall market demand.
Net Absorption measures the amount of newly occupied space in a given period minus the space vacated or put back on the market during that same period, providing key insights into market demand and occupancy trends.
Net Leasable Area (NLA) represents the precise space within a commercial property that can be rented to tenants. It is a critical metric for landlords and investors when estimating potential rental income.
The NPI, or National Property Index, is a property performance index maintained by the National Council of Real Estate Investment Fiduciaries (NCREIF).
The occupancy rate is a key performance indicator in the real estate industry, representing the percentage of currently rented or occupied units in a building, neighborhood, or complex. A high occupancy rate generally indicates strong demand for the property.
An occupancy report provides a comprehensive summary of a building's occupancy status, detailing pertinent information about tenants, vacant spaces, and leasing terms. This report is essential for property managers, owners, and investors to assess the property’s performance and make informed decisions.
The Overall Rate of Capitalization, often referred to as the Overall Rate of Return (ORR), is a key financial metric used in real estate to evaluate the income-generating potential of an investment property relative to its purchase price or market value.
A data series produced by the Bureau of Labor Statistics, Owners' Equivalent Rent (of Primary Residence) is used in compiling the Consumer Price Index (CPI) to track the rental value that the average owner-occupied home would command in the market.
Parking ratio refers to the number of parking spaces provided per 1,000 square feet of gross leasable area (GLA) in a property, ensuring adequate parking for tenants and visitors.
The Payback Period is the amount of time required for cumulative estimated future income from an investment to equal the amount initially invested. It is used to compare alternative investment opportunities.
A ratio expresses the quantitative relationship between two numbers, showing the number of times one value contains or is contained within the other.
The vacancy factor, also referred to as the vacancy rate, is a critical metric in real estate that measures the percentage of vacant rental properties compared to the total inventory of units in a specific area or property portfolio. It's essential for property managers, investors, and developers to assess the health of the rental market and forecast income expectations.
Vacancy rate represents the percentage of all available units or space that are vacant or not rented in a particular property, influencing projected income and financial planning.
