Math Problem

Math Problem

I was a terrible math student. How and why I ever decided to get a degree in accounting is a mystery to me! One of the first jobs I had after graduation was working for a plant that sold steel. My job, (I can’t believe I ever did this!) was to manually write down every piece of steel in inventory. Since we cut pieces for our customers 24/7, I had to write/track every single cut. At age 23, I didn’t really grasp how important this information was to my firm. Luckily after a year of complete boredom, I made a break to commercial real estate. I would soon learn why the numbers are important as a business owner.

With every transaction we complete at Compass Commercial, we provide a financial summary. What most people don’t realize is it more than just the rent/s.f. To make matters more complicated every type of real estate has different “standards,” and I use that term lightly because not every landlord really understands the “standards,” or doesn’t really care and does it their way.

Throughout 2018 I will be offering a blog series on commercial real estate math. Each math blog will give an example of a math equation for an expense in real estate. We’ll start with the easy ones, like annual rent and rent/s.f. Over the course of the year we’ll get to what a “base year” means and how to calculate all the costs in a transaction. This series will be called “Commercial Real Estate Mathematics” Hold onto your seats as I teach you Commercial Real Estate Math!



About the Author

Lynn Drake’s status is well known in the industry: She’s the commercial realtor focused on maintaining “true north” for her corporate clients. It’s a reputation built on 35 years of commercial real estate experience. Lynn became a commercial realtor in 2001 after 15 years in corporate real estate. Thus far in her career, Lynn has successfully completed over 1,500 real estate transactions ranging from small business tenant leases to the sale and purchase of industrial complexes.