---
title: "CRE Underwriting AI Agent | Kolena"
url: "/agent-library/deal-underwriting/"
description: "A pre-built AI agent from Kolena for CRE underwriting. Consolidate the OM, T-12, rent roll and Argus export into one cited underwrite with a go / no-go call."
updated: 2026-08-11T20:54:34+00:00
---

# Deal Underwriting

Consolidate a broker OM, the T-12 and rent roll, the Argus/underwriting export, and market data into one cited CRE underwriting with a full return model and a go / no-go call.

## What it extracts

- **Underwriting Summary** — The one-look front page - property snapshot, purchase price, going-in and stabilized cap rate, leverage, and the computed headline returns - synthesized from the analysis below so a reviewer can orient before reading detail.
- **Source Document Inventory and Completeness** — Which package documents were provided, partial, or missing, mapped to the user's files and flagged by importance - so the reviewer knows whether the return math can be trusted before reading it.
- **Property and Deal Overview** — The property and deal identity - type, location, vintage, unit count or rentable area, occupancy, seller, price, and price-per-unit/SF - the frame every downstream number hangs on.
- **In-Place Operating Statement (T-12 Normalized)** — The trailing-twelve-month statement normalized to a standard income statement - gross potential rent through EGI, opex, and NOI - so in-place performance is comparable across deals and the NOI foots, with capital costs kept out of opex.
- **Rent Roll and Tenancy Summary** — The revenue engine - per unit type (multifamily) or per tenant (commercial): occupancy, in-place versus market rent and the loss-to-lease, lease expirations, recovery type, and rollover exposure.
- **Sales and Rent Comparables** — The sales and rent comps the OM or appraisal uses to justify pricing and rents - price per unit/SF, cap rate, and rent per unit/SF - each with a note where a comp is stale or not truly comparable.
- **Market and Submarket Context** — The market read - submarket vacancy, rent growth, absorption, supply pipeline, prevailing cap rate, and demand drivers - drawn from the package and, where it is silent or dated, from sourced web data, each flagged as supporting or challenging the broker's view.
- **Broker vs Underwriter Assumption Reconciliation** — The judgment layer - for every material assumption, the broker/OM value, the Argus/pro-forma value, and the value the underwriter would adopt, with the delta, a broker-aggressiveness mark, and a one-line rationale. This is the assumption-reconciliation record the underwrite is expected to deliver.
- **In-Place vs Pro-Forma NOI Bridge** — The step-by-step bridge from in-place NOI to stabilized underwritten NOI - loss-to-lease burn-off, rent growth, occupancy, other income, and each expense adjustment - with the total pro-forma-versus-in-place delta surfaced so an aggressive underwrite cannot hide.
- **Purchase Price and Valuation Metrics** — The entry valuation - going-in and stabilized cap rate (NOI / price), price per unit/SF, total capitalized cost, yield-on-cost, and the exit-minus-entry cap spread - with the broker's headline cap rate reconciled to NOI / price.
- **Financing and Debt Sizing** — The debt sized to the binding constraint (LTV, DSCR, or debt yield) - amount, rate, IO, amortization, term, debt service - with DSCR and debt yield at close and stabilization, and guardrail breaches flagged.
- **Sources and Uses** — The capitalization table - uses (price, closing costs, financing fees, upfront capital, reserves) against sources (debt and equity as the plug) - with the sources-equal-uses balancing check shown and total equity required carried into the returns.
- **Cash Flow Projection** — The annual pro-forma cash flow across the full hold - EGI, NOI, capital, debt service, and unlevered and levered cash flow with the disposition-year sale proceeds - the stream every return metric is computed from.
- **Return Metrics** — The institutional return set computed with formulas shown - unlevered and levered IRR, equity multiple (MOIC), cash-on-cash, yield-on-cost, going-in and stabilized cap rate, DSCR, and debt yield - all derived from one cash flow stream and one equity basis.
- **Sensitivity Analysis** — Levered IRR and equity multiple stressed against the levers that move CRE returns - exit cap rate, rent growth, vacancy, interest/refi rate, renovation premium, and hold - with scenarios that breach the equity hurdle or DSCR floor flagged.
- **Key Risks and Mitigants** — The material risks by category - market, execution, interest-rate/refinance, exit-cap expansion, expense/tax, tenancy/concentration, leverage, environmental, sponsor - each with a severity anchored to the sensitivity results and the available mitigant.
- **Underwriting Consistency and Data-Quality Checks** — The recompute-and-reconcile checks a senior underwriter runs before trusting the model - NOI foots, cap rate/DSCR/debt-yield/yield-on-cost tie out, sources equal uses, the return set is internally consistent, no capital in opex, and the pro-forma delta is disclosed - each Pass, Fail, or Review.
- **Underwriting Recommendation** — The machine-readable go / no-go verdict - Pursue, Pursue with conditions, Re-trade / reprice, Pass, or More information needed - weighed across the returns, sensitivity, risks, and consistency checks.

## Where it fits

- **Process** — Real estate acquisitions underwriting
- **This step** — Deal underwriting - consolidate the package into a cited underwrite, reconcile the broker's assumptions against an independent view, and issue a recommendation
- **Upstream** — Deal sourcing - a broker offering memorandum or an off-market opportunity arrives and the team assembles the package (T-12, rent roll, the broker's Argus/underwriting export, PSA or LOI, lender term sheet, and market data)
- **Downstream** — Investment-committee decision (often via an IC memo); Letter-of-intent / PSA negotiation and re-trade; Debt sizing and lender submission; Closing and asset onboarding

## What it needs

### Documents
- Offering memorandum (OM)
- Trailing-twelve-month operating statement (T-12)
- Current rent roll
- Broker underwriting model or Argus export
- Unit mix or stacking plan
- Purchase and sale agreement (PSA) or letter of intent (LOI)
- Lender term sheet or loan quote
- Capital-expenditure / renovation budget
- Appraisal
- Property condition assessment (PCA)
- Environmental report (Phase I)
- Tax bills or assessor records
- Market / comparable data

### Systems
- Deal or document repository
- Email
- Google Drive or SharePoint
- The firm's underwriting model (Excel / Argus)

### Prerequisites
- Your underwriting model template and return hurdles
- The complete deal package including the T-12 and rent roll
- Target market assumptions (rent growth, exit cap rate, reserves) where the documents are silent
- Your lenders' current DSCR and debt-yield thresholds

## What it produces

A cited commercial real estate underwrite - source-completeness check, property overview, normalized in-place statement, rent roll and tenancy, comps, market context, a broker-versus-underwriter assumption reconciliation, an in-place-to-pro-forma NOI bridge, valuation metrics, debt sizing, sources and uses, a full-hold cash flow projection, the return set (unlevered/levered IRR, equity multiple, cash-on-cash, yield-on-cost, DSCR, debt yield), a sensitivity table, key risks, consistency checks, and a go / no-go recommendation

### Destinations
- The firm's underwriting model
- Investment-committee or deal file
- CRM or deal-management system
- Deal folder

## Review model

An acquisitions analyst or investment-committee member reviews the assumption reconciliation, the values the agent labeled as underwriting assumptions (versus extracted facts), the consistency checks, and the recommendation before the deal advances. Judgment-heavy calls - market view, sponsor conviction, final pricing - stay with the reviewer.

## Who uses it

- Acquisitions Analyst
- Acquisitions Associate
- Investment / Underwriting Analyst
- Acquisitions Director / Investment Committee Member

## Volume fit

- **Works best for** — acquisitions teams screening a steady flow of commercial deals - where analysts otherwise spend most of their underwriting time re-keying broker assumptions into Excel, and a fast, credible read decides which deals get pursued
- **Too small for** — a single one-off acquisition a partner will model by hand regardless

## Grounded in

- Net Operating Income convention: NOI = Effective Gross Income - Operating Expenses; capital expenditures and replacement reserves are excluded from operating expenses _(verified 2026-07-22)_
- Capitalization-rate convention: Going-in cap rate = Year-1 NOI / purchase price; terminal/exit value = forward NOI / exit cap rate _(verified 2026-07-22)_
- Return-metric definitions: unlevered IRR (property-level cash flows), levered IRR (equity cash flows after debt service), equity multiple / MOIC = total distributions / equity invested, cash-on-cash = annual levered cash flow / equity invested, yield-on-cost = stabilized NOI / total project cost _(verified 2026-07-22)_
- Lender underwriting metrics: DSCR = NOI / annual debt service; Debt Yield = NOI / loan amount; loan sized to the minimum of the LTV-, DSCR-, and debt-yield-based maximums _(verified 2026-07-22)_
- Uniform Standards of Professional Appraisal Practice (USPAP) _(verified 2026-07-22)_

## Provenance

built to industry best practice for commercial real estate deal underwriting