In one sentence
The annualized discount rate at which an investment's cash flows net to zero, the standard time-weighted return measure.
The longer version
IRR expresses an investment's return as an annualized rate that accounts for the timing of cash flows: earlier returns are worth more. It is the headline return figure in most real estate investment models.
Lenders encounter IRR in sponsor projections. It is sensitive to assumptions and timing, so it is read alongside simpler measures like equity multiple and cash-on-cash.
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