Notes on underwriting
Working notes on the things that actually move a commercial real estate deal: rollover, downtime, concessions, debt tests and the spread between what you build to and what you sell at.
- Retail · Second generation spaceWhat Happens to a Vacant Rite Aid Box
Rite Aid went from roughly 2,000 stores to zero between 2023 and 2025. Here is what that leaves behind, and how to underwrite one of the boxes.
- Retail · Backfill demandParty City Put 695 Leases on the Market. Here Is Who Took Them
The Party City liquidation auctioned nearly 700 leases in 44 states. The bidders tell you more about retail demand than the closure did.
- Retail · ConversionsUnderwriting a Dark Box: The Four Inputs That Decide It
Buying a vacant retail building is a development deal wearing an acquisition’s clothes. Here is what actually moves the return.
- Capital marketsWhy a 100 bps Move in Treasuries Does Not Move Every Cap Rate
Cap rates follow rates, but not one for one and not evenly across property types. The spread is where the information is.
- Retail · RolloverRenewal Probability Is the Input Nobody Can Give You
On a multi-tenant retail deal, the assumption that moves the return most is the one with the least evidence behind it.
- LeasingThe $15 Deal That Is Really a $12 Deal
Face rent is a headline. Net effective rent is what you collect. The gap between them is where lease comparisons go wrong.
- DebtDSCR, LTV and Debt Yield: Which One Actually Binds
Lenders size a loan three ways and lend the smallest. Knowing which test is binding tells you what to negotiate.
- Retail · RolloverReading a Rollover Schedule: WALT, Concentration and the Year That Hurts
Two centers with identical rent rolls can carry completely different risk. The expiry schedule is where you find it.
- MultifamilyTurnover Is the Line Multifamily Pro Formas Understate
It is not the paint and carpet. It is the days the unit sits empty, the locator fee, and the make-ready labor, every single time.
- DebtInterest-Only: What It Flatters and What It Does Not
An IO period improves every number a borrower looks at and none of the numbers that determine whether you can refinance.
- ValuationThe Blended Cap Rate Is Not the Average of the Cap Rates
Averaging the rates and valuing each income stream give different answers. One of them is wrong, and it is costing sellers money.
- Development · Value-addYield on Cost Against Exit Cap: The Only Spread That Matters on a Conversion
If you report one number from a value-add or conversion deal, report this one. It survives contact with an investment committee.
- Retail · Backfill demandJoann Put 18.5 Million Square Feet on the Market. Who Took It
Joann liquidated more than 800 stores in 2025. The backfill tells you which tenants are actually expanding.
- Retail · Backfill demandBig Lots Sold 460 Leases to a Liquidator. Then Half the Stores Reopened
The Big Lots wind-down produced an unusual outcome: a liquidator bought the leases, and a regional operator reopened hundreds of them.
- Retail · RolloverAnchor Space Is Taking 25 Months to Backfill. Model It That Way
Backfill demand is real and it is also slower than it was. Both things are true, and only one of them is in most pro formas.
- Retail · LeasesWhy a Tenant Bankruptcy Can Be Good For You
Lease assumption transfers your space to a stronger covenant, pays your arrears and costs you no allowance. Here is the mechanism.
- Retail · Second generation spaceThe Pharmacy Box Glut: Rite Aid, Walgreens and CVS
Three chains, thousands of closures, one very specific building type hitting the market at the same time.
- AcquisitionsSeven Places an Offering Memorandum Inflates NOI
The broker’s cap rate and your cap rate are rarely the same number. Here is where the gap usually comes from.
- AcquisitionsGround Lease or Fee: What Changes in Your Underwriting
A leasehold deal can look identical on a cap rate and behave completely differently on an exit.
- Retail · LeasesSecond-Generation Restaurant Space: What the Hood Is Worth
A former restaurant is either the cheapest space you will ever lease or an expensive shell with grease in the walls.
- DebtWhat a Lender Actually Looks At In Your Rent Roll
Not the total. Six things, and most borrowers are surprised by which ones matter.
- Retail · LeasesCo-Tenancy Clauses: How One Vacancy Becomes Three
The anchor leaving is bad. The clause that lets four in-line tenants cut their rent because the anchor left is worse.