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Internal Rate of Return (IRR)
The annualized compounded rate of return equating the present value of all cash flows and exit disposition proceeds to the initial investment.
Internal Rate of Return (IRR) is the annualized compounded metric that equates the net present value (NPV) of all future operating cash flows and terminal sale proceeds from a real estate investment to zero.
IRR accounts for the time value of money, enabling institutional sponsors and private investors to compare investment performance across disparate holding periods.
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See all Asset Management terms →Asset Management
Strategic oversight focused on financial maximization, capital allocation, risk management, and long-term asset value growth for property owners.
Read definition →Asset Repositioning & Adaptive Reuse
The strategic redevelopment and physical conversion of obsolete real estate into alternative commercial, residential, or mixed-use assets.
Read definition →Capital Expenditure (CapEx)
Long-term investment funds used to improve, replace, or add major physical property assets that are capitalized rather than expensed immediately.
Read definition →Capital Expenditure Reserve Analysis
Financial modeling calculating annual cash reserves needed to fund anticipated roof, paving, and mechanical replacements over a 30-year lifecycle.
Read definition →Capitalization Rate (Cap Rate)
The unleveraged rate of return on a property investment calculated by dividing annual Net Operating Income by current market asset value.
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