Deal Underwriting

What it extracts

18 extraction fields

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

What it needs

What it produces

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

Volume fit

Grounded in

• Net Operating Income convention: NOI = Effective Gross Income - Operating Expenses; capital expenditures and replacement reserves are excluded from operating expensesverified as of 2026-07-22
• Capitalization-rate convention: Going-in cap rate = Year-1 NOI / purchase price; terminal/exit value = forward NOI / exit cap rateverified as of 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 costverified as of 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 maximumsverified as of 2026-07-22
• Uniform Standards of Professional Appraisal Practice (USPAP)verified as of 2026-07-22

Changelog

• July 2026