The MOST Important Return Metric in Commercial Real Estate // Commercial real estate investors value their deals based on the investment returns those properties can generate, essentially back-solving to a purchase price that will produce their targeted returns based on the projected cash flows of the real estate investment.

And with that, most investors are usually focused most on either the IRR, the equity multiple, the cash-on-cash return, or a mixture of all three of these metrics, each of which tell an important story about the deal being analyzed, and the timing (and amounts) of the property’s cash flow distributed over time.

And since the IRR, equity multiple, and cash-on-cash can each tell a completely different story about a deal, the logical next questions become, “Which metric should I be focusing on, and which metric is most important to me?”

In this video, we’ll try to tackle this question by breaking down some of the most common scenarios when focusing on each of these return metrics makes the most sense, and which metric is right for you to focus your attention on as you head into your next deal.

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