Retail Blueprint
The Brief
Retail Blueprint

Market intelligence · Deal analysis · Retail strategy

Learn · Retail CRE 101

Retail real estate, from first principles.

Six tracks that progress from foundational concepts to the practice of investing, development, and brokerage.

Illustrative neighborhood retail center

Start with the fundamentals

Understand the income. Understand the value.

The capitalization rate is the ratio of a property's net operating income to its price.

Read the cap rate primer
Track 01 · Beginner

Foundations

  1. 01What Is Retail CRE?Coming soon
  2. 02Property TypesComing soon
  3. 03How Retail Properties Make MoneyComing soon
  4. 04NOIComing soon
  5. 05Cap RatesRead
  6. 06ValuationComing soon
Track 02 · Beginner

Leasing

  1. 01Base RentComing soon
  2. 02NNN ChargesComing soon
  3. 03CAMComing soon
  4. 04Percentage RentComing soon
  5. 05Lease TermsComing soon
  6. 06OptionsComing soon
  7. 07Tenant ImprovementsComing soon
Track 03 · Intermediate

Tenants

  1. 01Tenant CreditRead
  2. 02National vs. Local TenantsComing soon
  3. 03GuarantiesComing soon
  4. 04Lease StructuresComing soon
  5. 05Tenant MixComing soon
Track 04 · Intermediate

Investing

  1. 01UnderwritingComing soon
  2. 02Cash FlowComing soon
  3. 03DebtComing soon
  4. 04EquityComing soon
  5. 05ReturnsComing soon
  6. 06Exit ValueComing soon
  7. 07RiskComing soon
Track 05 · Advanced

Development

  1. 01Site SelectionComing soon
  2. 02EntitlementsComing soon
  3. 03ConstructionComing soon
  4. 04Pre-LeasingComing soon
  5. 05Development EconomicsComing soon
Track 06 · Advanced

Brokerage

  1. 01ListingsComing soon
  2. 02ProspectingComing soon
  3. 03Owner RelationshipsComing soon
  4. 04Tenant RepresentationComing soon
  5. 05Investment SalesComing soon
  6. 06Deal ProcessComing soon

Interactive: Value = NOI ÷ Cap Rate

RB · Valuation model · Illustrative / hypothetical

Value = NOI ÷ Cap Rate

Implied value

$1,538,462

$100,000 ÷ 6.50%

Sensitivity · same NOI, different cap rates

5.50%
$1,818,182
6.00%
$1,666,667
6.50%
$1,538,462
7.00%
$1,428,571
7.50%
$1,333,333

Lower cap rates imply higher values for the same income. All figures are illustrative and hypothetical and do not reflect any market or property.

Essential terms

NOI
Net operating income: property revenue minus operating expenses, before debt service and capital items.
Cap Rate
NOI divided by price. A snapshot measure of yield used to compare and value income properties.
NNN
Triple-net lease, where the tenant pays its share of taxes, insurance, and common area maintenance in addition to base rent.
CAM
Common area maintenance: shared costs of operating parking lots, landscaping, lighting, and similar areas.
Co-Tenancy
A lease clause allowing a tenant remedies, such as reduced rent, if specified other tenants close or occupancy falls.
Anchor
A large tenant expected to generate traffic for a shopping center.
Full glossary