12/05/2019
COMMERCIAL REAL ESTATE RETURN ON INVESTMENT
The Return On Investment (ROI) from a commercial property is defined as the percentage of each dollar of investment in acquiring and preparing for rental a commercial property, that said property provides as Net Operating Income (NOI). For example, if a three-story office building with 30,000 square feet of net leasable space costs $2,000,000, and it provides total gross NOI (rent roll income minus operating expenses covered by the lessor) of $25,000 per month, equivalent to $300,000 per year, then the ROI for that building would be equal to $300,000/$2,000,000 or 15%.
