About Penny Parker - Broker

Penny Parker has been a licensed real estate broker since 1989, specializing in retail, hospitality, office and multifamily properties. She has considerable experience in commercial and residential development and redevelopment, from acquisition to planning and zoning and tenant leasing. Besides representing sellers, she acts as a buyer’s broker in numerous investment transactions.

Penny has been involved in transactions throughout the state of Connecticut and western Massachusetts. In southern Connecticut she has brokered the sale of land for commercial retail centers, active adult communities and hospitality properties. She has brokered sales of multifamily properties and residential subdivisions in New London, Hartford, and Middlesex counties. Additionally, she has experience in the sale and leasing of restaurant and food-related businesses. She represents international clients in the acquisition of investment properties throughout New England and New York state
as well as representing clients in the acquisition of properties for 1031 tax exchange transactions.

Penny, originally from Oak Park, Illinois, moved to New York shortly after college at Purdue University. Fluent in French and Italian she was an International Flight Service Manager for TWA flying to Europe and the Middle East. During her years living in Manhattan, she also acquired a degree in Interior Design from the New York School of Interior Design. She resides in Essex, CT.

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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