Commercial Lending Glossary
A glossary of definitions for common terms used in commercial real estate hard money lending & CRE investing.
The net change in occupied space in a market between the current measurement period and the last measurement period, including decreases and increases in inventory levels. It is recommended to disclose the inclusion (Total Net Absorption) or exclusion (Direct Net Absorption) of sublease space in any calculation of net absorption. Net absorption can be either positive or negative.
Net Operating Income (NOI)
A calculation used to analyze real estate investments that generate income, and includes all revenue from the property minus all necessary operating expenses. Revenue might include rent, parking fees, and service fees, such as vending and laundry machines. Operating expenses are those required to run and maintain the building and its grounds, such as insurance, property management fees, utilities, property taxes, repairs, and janitorial fees. NOI is a before-tax figure; it also excludes principal and interest payments on loans, capital expenditures, depreciation and amortization.