For Sale

Property Type

Retail, Industrial / Flex, Office

Building Size

30,110

Lot Size

34.06 Acres

Lot Location

Eastern CT, Northern CT

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For Sale or Lease Three buildings on Total Acres: 34.06, Public Water & Public Gas. Zone: C-I
Commercial Industrial. Allowed Uses: Medical Facility, Cannabis Cultivation & Sales, Distribution, Special Education, Office, Flex
space, Retail, Warehouse, Manufacturing. Proposed Changes: New City gas heat & central AC, New Building Exteriors, New
Roofs, New Windows, New Asphalt, and New Landscaping.
Also for Lease. Agent is Owner

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Lyman Guide

Ways to Financially Analyze a Commercial Real Estate Investment

Commercial real estate (CRE) is a numbers game

So, financial analysis is the foundation for making informed commercial real estate decisions

  • Helps you evaluate financial performance, investment return, property values
  • Helps you arrive at the value of a purchase, compare purchase options

Key measures

  • Net operating income (NOI)
    • NOI = gross income — operating expenses
    • Lenders use this to determine the maximum loan amount they’ll approve
  • Debt-service-coverage ratio (DSCR)
    • DSCR = NOI / annual debt service
    • Tells you the cash flow available to service the property’s debt
    • DSCR of 1.25 or higher normally adequate for a CRE investment
  • Capitalization rate (cap rate)
    • Cap rate = NOI / property’s market value
    • Used to determine the rate of return expected on an investment property
    • Can also calculate a property’s value based on a desired rate of return, using the following formula:
      • Property value = NOI / cap rate
    • Useful for comparing the relative values of alternative CRE investments
    • Higher cap rate generally indicates a higher return, but also, typically, a higher risk
  • Return on Investment (ROI)
    • REI = NOI / amount invested
    • The higher the ROI, the better the investment
  • Cash-on-cash return (CoC)
    • CoC = annual pretax cash flow / total cash invested
    • The higher the CoC return, the better the investment