What are the four basic components of NOI? - ANSWER 1 - Potential rental income (PRI)
2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.) - ANSWER Lease analysis
PRI equals NOI in what property/tenant scenario? - ANSWER If the property has one tenant with
a long-term absolute NNN lease.
[XXXX] is PRI minus vacancy and collection losses. - ANSWER ERI (Effective Rental Income)
Name some items which are EXCLUDED from Operating Expenses. - ANSWER Interest and
principal on debt on the property
Depreciation (cost recovery)
Capital Expenditures
Income Taxes
Reserves for Replacement
Tenant Improvements
True or False: Depreciation is included in Operating Expenses. - ANSWER False
True of False: Principal and interest on debt financing is included in Operating Expenses -
ANSWER False. This is an expense of ownership, not an operating expense.
2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.) - ANSWER Lease analysis
PRI equals NOI in what property/tenant scenario? - ANSWER If the property has one tenant with
a long-term absolute NNN lease.
[XXXX] is PRI minus vacancy and collection losses. - ANSWER ERI (Effective Rental Income)
Name some items which are EXCLUDED from Operating Expenses. - ANSWER Interest and
principal on debt on the property
Depreciation (cost recovery)
Capital Expenditures
Income Taxes
Reserves for Replacement
Tenant Improvements
True or False: Depreciation is included in Operating Expenses. - ANSWER False
True of False: Principal and interest on debt financing is included in Operating Expenses -
ANSWER False. This is an expense of ownership, not an operating expense.
