How do you get the NOI on a free standing retail building.

In General Area - Asked by Norman Jones J. - Sep 15, 2011
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Answer(s)

Chris F.
Broker/Agent
Salem, OR

Take the total lease income minus building expenses (does not include debt service) and you have your NOI. Big thing is knowing what responsibilities there are for the tenant to pay, and for the landlord to pay. That should be spelled out very clearly in the lease.

Sep 15, 2011
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Chris R.
Broker/Agent
Denton, TX

NOI is the remaining income available after normal operating expenses - management - maintenance - insurance - taxes - have been paid. Some leases - IF NNN leases - likely contain language for some expenses (some to all) to be reimbursed by the tenant(s) and this would effect the NOI figure.

Sep 20, 2011
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Leonard C.
Broker/Agent
Jacksonville, FL

Net Operating Income:
Rents + CAM charges + any other income
Less:
5% Vacancy Allowance
all other operating expenses (except mortgage payments)
Equal:
Net Operating Income

Sep 21, 2011
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Glen W.
Lender/Mortgage Broker
Atlanta, GA

NOI is revenue minus expenses (exclude debt service). The leases should provide the basis for this calculation. Be careful if you are purchasing the property. I have seen many instances where the seller is light on their expenses. The NOI question leads to the next question of what is the cap rate so that you can accurately determine value

Dec 25, 2011
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