Real estate underwriting, made smarter

Illustrative ten-year proforma: gross revenue, operating expenses, and net operating income projected across years one, five, and ten — NOI reaching 3.19 million dollars by year ten — at a 6.7 percent cap rate, 1.35 times debt-service coverage, and an 18 percent internal rate of return.

Guided assumptions: vacancy 5.0 percent, rent growth 3.0 percent, and exit cap 5.5 percent, each positioned on a slider against the machine-learning market range and market average for the submarket.

Automated extraction: a trailing-twelve-month operating statement parsed line by line — rental income, payroll, utilities, and property taxes — with one line still being parsed.

Tax analysis: county, city, and school millage rates combine into a 42.45 mill effective rate and an estimated annual tax of 184,200 dollars.

Capital structure: 65 percent senior debt, 10 percent mezzanine, and 25 percent equity on a 42.5 million dollar total capitalization, with an 8 percent preferred return and an 80/20 split above the preferred.

Market comps: the subject property, Maple Court, compared against three rent comparables by monthly rent and rent per square foot, with a bar chart plotting the same rents.