Financial Analysis

The goal of investing commercial real estate is to create and preserve wealth through the generation
of income and/or profit. Our advisors use multiple tools to analyze an investment’s potential profit
and monitor its performance. We know that a single number can never give a complete picture.
Rather than look at one or two metrics to determine an investment’s financial status, we analyze each
investment from various perspectives using multiple scenarios or assumptions. A few of the tools we
employ include:
• Discounted Cash Flow Analysis
• Calculate Internal Rates of Return and Net Present Values of Potential or Existing Investments
• Analyze Financial Statements of Potential or Existing Investments
• Analyze the cash before- and after-tax cash flows of an investment property
• Examine the evaluate the operating income and expenses
• Calculate Cost-Recovery (Depreciation) Deductions
• Examine the impact of leverage on an investment
• Sensitivity Analysis
• Compare before- and after-tax yields

While you collect your own research based on the local market and your own experience, you should consider incorporating a real estate market report in your final analysis. An office building market research expert can help sort though all the choices and handle all the details of your project projections.

 

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