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URL:  https://boards.fool.com/price-of-buildingtotal-gross-rent-for-one-year--19099429.aspx

Subject:  Re: FAQ Date:  5/26/2003  7:34 PM
Author:  jiml8 Number:  3167 of 14356

Price of building/Total gross rent for one year = Gross Rent Multiplier.

GRM is a quick and dirty method to value a building. Lower numbers equate to stronger cash flow. There is a crude relationship to market capitalization rate, which a bank will use, but GRM doesn't consider the details (such as cost of utilities, and likely vacancy factor) but only compares rents to purchase price.


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