Annuity

An annuity in real estate finance is a series of equal payments made at regular intervals over a specified period of time. This concept underpins many CRE financial calculations, including mortgage payment structures, lease payment streams, and discounted cash flow analyses.

Understanding annuity principles is essential when evaluating the present value of a long-term lease or loan. Real estate professionals use annuity formulas to determine how much a future income stream is worth in today’s dollars, which directly informs investment decisions and property valuations.