Topic
Cap Rates
Guides and real deal teardowns on cap rates.
How I actually read a deal
Why a cap rate alone lies, and the five things I actually adjust for before I trust a number.
Read it →Hold or sell? The question nobody owns.
The yield-on-equity framework I walk owners through: what pushes toward a sale, and the honest reasons to hold.
Read it →Why one month can cost you 25 basis points
How value quietly bleeds as lease term burns off, and why it accelerates the closer you get to expiration.
Read it →Cap rate, explained, and how to actually use it on retail property
What a capitalization rate is, how to apply it to retail investment property, what it hides, how to use it as a strength, and the best- and worst-case ways it plays out.
Read it →Net operating income (NOI): the number your whole deal rests on
What net operating income is, how to apply it to retail investment property, the ways it gets inflated, how to use a clean NOI as leverage, and the best/worst-case outcomes.
Read it →Lease Escalations Explained: How Rent Bumps Drive Net-Lease Value
Lease escalations are the scheduled rent increases baked into a net-lease. Here's how they work, why they move value, and what to check before you buy or sell.
Read it →Cash-on-Cash Return: The Number I Actually Look At First
Cash-on-cash return measures the cash income a property hands back relative to the cash you actually put in, and it's the number that shows you what leverage is really doing to your deal.
Read it →Internal Rate of Return (IRR): What It Actually Tells You in a Net Lease Deal
Internal rate of return (IRR) captures the full arc of a deal, income, timing, and exit, not just the entry cap rate. Here's how it actually plays out in retail net lease and what to watch for before you trust the number.
Read it →Effective Rent vs. Face Rent: The Number on the Sign Isn't the Number That Matters
Face rent is the headline number in a lease; effective rent is what's left after concessions, free rent, and tenant allowances are netted out, and it's the one that should drive your valuation.
Read it →Exit Cap Rate Explained: The Number That Quietly Decides Your Return
The exit (reversion) cap rate is the assumption you make today about what a buyer will pay when you eventually sell, and in net lease retail, it usually moves your return more than the rent does.
Read it →Capital Expenditures (CapEx): The Bill That Shows Up After You Close
A plain-English look at capital expenditures (CapEx) in commercial real estate: what counts as CapEx, how it works in net lease retail, and how to price it into a deal before it surprises you.
Read it →Going-In Cap Rate Explained: What You're Really Buying on Day One
The going-in cap rate is the yield you buy at on day one, based on in-place income. Here's how I read it on a net-lease deal, what it hides, and how to use it without getting fooled.
Read it →The Equity Multiple, Explained: What "2x" Really Means for a Net-Lease Deal
The equity multiple tells you how many total dollars a deal returns for every dollar you put in. Here's how I use it, where it misleads buyers, and how to pair it with time and cap rates on retail net-lease property.
Read it →Price Per Square Foot Explained: A Net-Lease Buyer's Shorthand
Price per square foot is the quick sanity check I run on every net-lease deal. Here's what it tells you, where it lies, and how to use it without getting burned.
Read it →Gross Rent Multiplier (GRM): The 30-Second Screen for Net-Lease Deals
The gross rent multiplier divides price by annual gross rent to give you a quick read on a deal. Here's how to use it to screen net-lease properties fast, and why it should never be the last number you check.
Read it →The Operating Expense Ratio in Net Lease: What It Really Tells You
The operating expense ratio measures what share of a property's income gets eaten by operating costs. In net-lease retail, it's a fast tell on lease structure, reimbursements, and where your risk actually sits.
Read it →Replacement Reserves Explained: The Line Item Net-Lease Buyers Skip
Replacement reserves are the cash you set aside for the big, occasional capital costs a property will eventually need. Here's how I think about them on a net-lease deal, and why leaving them out of your numbers quietly inflates your return.
Read it →The 7.25 cap that was really a countdown timer
A 7.25 cap that everyone loved, until you read the lease: four years of term, a single-store guarantee, and an old roof on the landlord.
Read it →The 6.5 that beat the 7.5
Two deals, same month: a 7.5 and a 6.5. The lower cap was worth more, and it wasn't close. Here's why.
Read it →Flat rent, quiet erosion
This one doesn't blow up. It just quietly loses value for fifteen years, and nobody notices until they go to sell.
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