Present Value (PV)
Present value is the current value of a future sum of money given a specified rate of return (discount rate). In CMBS and broader finance contexts, PV is used to translate future cash flows into an equivalent "today" value.
- Where it applies
- Generally, not specific to New York
- When it comes up
- Valuation; underwriting; structured finance modeling
- Property types
- All assets (finance and valuation)
In practice
PV is a function of both cash-flow timing and the discount curve; institutional models often require explicit day-count and compounding conventions.
Read more in the Knowledge Base
- Deferred Maintenance Pricing FrameworkBuyers
- Charitable Remainder Trusts and Property Donation StrategiesSellers
- Proprietary Comp Modeling - Building Market Intelligence Beyond StreetEasyBuyers
- Unit Turnover Operations: Turn Cost Minimization and the 14-Day Turn ProtocolLandlords
Related terms
Valuation and Appraisal
- Appraisal Standards of Professional Practice
- Capitalization Rate (Cap Rate)
- Direct Capitalization
- Discounted Cash Flow (DCF) Analysis
- Income Approach
- Sales Comparison Approach
- Uniform Standards of Professional Appraisal Practice (USPAP)
General information, not legal, tax or financial advice.