About Carolyn Trotta - Broker

The focus for Carolyn is northeastem Connecticut, aka the Quiet Corner, where she grew up, spent her undergraduate college years and now resides. Her knowledge and experience in the region is highly valued by commercial buyers, sellers, landlords and tenants, to whom she brings LYMAN’s full range of commercial brokerage and development services.

Carolyn received her salesperson’s license in 2005 and her broker’s license in 2010.
Carolyn holds a B.S. in Finance from the UConn School of Business and an M.B.A. from Florida Atlantic University.

See My Listings Below

My Listings

No Post Found

Join Mailing List

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