Norwich To Be Built Data Center/Distribution Center Manufacturing/Warehouse Facility

17.16 Acre lot. To Be Built Data Center/Distribution Center Manufacturing/Warehouse Facility , 36′ clear ceiling height. Pre-
Cast Concrete/Tilt Up construction. Vehicle Parking: 285 Spaces, Van Parking: 209 Spaces, Van Staging: 80 Spaces, Loading
Docks: 12 Spaces. Frontage: 1,027 Ft. 12” Municipal Water Line, 8” Sewer Line, Gas Line (600 P.S.I.) Electrical Service: 1,200
(approx.), Year Built: 2022 (Planned), Zoned: Business Park Minimum 10 year term. Parcel has frontage on Connecticut Ave
and Vergason Ave. Land is part of Norwich Business Park. Easy access to Route 2, Route 32 & I-395.

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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