Internal Rate of Return
The blended return across the life of an investment.
Definition
Internal Rate of Return is The blended return across the life of an investment. It comes up most often when the property has to be judged as an investment, not just as a building that stayed busy.
The term keeps showing up because return metrics translate rent, expense, and value into a language owners, lenders, and buyers all understand. Each metric strips away a different layer of noise, so using the wrong one can distort the story.
Use cases
Use Internal Rate of Return to translate property operations into an investment result.
Review Internal Rate of Return when the team needs to compare assets using a metric that matches the decision being made.
Track Internal Rate of Return so operations can keep ownership discussions grounded in return, not just activity.