Full Definition
Capital expenditures are non-recurring investments to extend a property's useful life or add value — roof replacement, HVAC unit replacement, parking lot repaving, tenant improvements, facade renovations. CapEx is capitalized and depreciated over time (not expensed). Projected CapEx over a 10-year hold is a key component of underwriting.
Related Terms
Operating Expenses (OpEx)
Recurring costs required to operate a property — taxes, insurance, maintenance, utilities, management.
PCA (Property Condition Assessment)
Commercial building inspection far more comprehensive than residential — evaluates structure, systems, and projects capital expenditures over 10-12 years.
TI Allowance (Tenant Improvement Allowance)
Dollar amount landlord contributes toward tenant's buildout of leased space, typically quoted per square foot.