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Back-of-the-napkin commercial real estate underwriting, in seconds.
5 Second Model · back-of-the-napkin underwriting
Strip Plaza Quick Underwrite
Twenty tenants, staggered rollover, and what it costs you every time one leaves.
Rollover is the whole risk in a strip centre. Every lease expiry is a coin flip on downtime, a fresh allowance and another commission, and the stagger matters more than the headline rent. This model takes a rent roll of up to twenty tenants, each with its own size, rent, escalation, remaining term and cap rate, then runs the rollover schedule across your hold. It reports weighted average lease term, tenant concentration, square feet expiring each year, the blended cap, and what the TI and commissions actually cost you.
Rent roll
Levered IRR / Equity multiple
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The centre today
| Total gross leasable area | -- |
| Occupied square feet | -- |
| In-place base rent | -- |
| Average in-place rent | -- |
| Weighted average lease term | -- |
| Recoveries, net of non-recoverables | -- |
| In-place net operating income | -- |
| Largest tenant, share of income | -- |
| Expiring within the hold | -- |
| Vacant space to lease | -- |
Sources and uses
Hold period comparison
The same deal underwritten to three exits. Every column is a full re-run.
Deal metrics
Yield by year
Return on total cost as the deal stabilizes, against the cap rate you exit at
Rent roll detail
Priced tenant by tenant
Value contributed by each tenant at its own cap rate
Operating expenses
Recovered from tenants at your recovery rate; the balance is yours
Rollover schedule
Square feet expiring each year of the hold
What it costs to hold
| Purchase price at the blended cap | -- |
| Price per square foot | -- |
| Landlord work letter | -- |
| Roof replacement | -- |
| Closing costs | -- |
| All-in basis | -- |
| Loan proceeds and fee | -- |
| Equity required | -- |
| Year-one DSCR | -- |
| TI and commissions over the hold | -- |
Cash flow by year, after rollover costs and debt
The exit
| Forward NOI at sale | -- |
| Sale price at the exit cap | -- |
| Sale broker fee and closing | -- |
| Loan payoff | -- |
| Net proceeds | -- |
| Unlevered IRR | -- |
| Net present value | -- |
Debt service coverage by year
Amortization schedule
Return sensitivity
Levered IRR across market rent on rollover and exit cap. Your case is outlined.
Scenario analysis
Each column is the whole model re-run, not an adjustment to the base case.
What moves the return most
Points of IRR between the low and high case for each driver, ranked
Where this deal breaks
Solved against your own discount rate. Everything else held at your assumptions.
Common questions
- What is WALT and why does it matter?
- Weighted average lease term is the rent-weighted average of the years remaining across the rent roll. It is the single best shorthand for how much rollover risk you are buying, and lenders size against it.
- How much tenant concentration is too much?
- Under about 30% of income from any one tenant is comfortable. Above 40% you effectively own a single-tenant deal wearing a strip centre’s clothes, and it reprices if that lease rolls badly.
- What renewal probability should I assume?
- It is the input most worth getting right and the one nobody can tell you for certain. At 70% you pay a renewal allowance and a small commission most of the time; at 30% you pay full new-deal TI, a full commission and months of downtime on nearly every expiry.