Input Tabs

Overview

There are six blue tabs that allow data input in the Underwriting Workbook. Below we provide an overview of four of the tabs, describing the input fields and their impact on the model.

Note: the Debt Inputs and Waterfall tabs are each described in separate articles. 

Article Contents: 

• Unleveraged Cash Flow Tab
• In Place Tab
• Rollover Tab
• Portfolio Valuation Tab

Unleveraged Cash Flow Tab

For a single property Underwriting Workbook, the Unleveraged Cash Flow tab includes all of the inputs to generate the Valuation Matrix and other key valuation metrics, in addition to presenting a detailed cash flow, economic occupancy and unleveraged NPV and IRR for each year of the Report Term.

For a Folder Underwriting Workbook, this tab mirrors the single property Unleveraged Cash Flow tab, however, many of the valuation inputs are found on the Portfolio Valuation tab allowing for property specific assumptions. When property specific assumptions are entered on the Portfolio Valuation tab, the corresponding field on the Unleveraged Cash Flow tab will display "Varies.”

Screenshot Example of the Unleveraged Cash Flow Tab for a single property:

Note: The initial/default inputs for the Underwriting Workbook are set in rDCF in the Property Section > Valuation Settings tab. The inputs in blue can be overwritten in the UW.

Unleveraged Cash Flow Tab Input Fields

Fields with an asterisk (*) indicate that the field must be edited on the Portfolio Valuation tab for a Folder UW.

Input Field Category /  Name	Input Options	Description	Impact on Model
Model Summary
Deal Name	Text field	Initially populated with the Property Name from the rDCF model. Can be overwritten in UW.	Appears in top left corner of all tabs.
Scenario	Text field	Defaults to rDCF selected scenario name. Can be edited.	Appears in top left corner of all tabs.
Valuation Assumptions
*IRR/NPV Discounting*	Monthly or Annual	Indicates calculation method to be used for IRR / present value calculation. Choose from Monthly or Annual Note: Monthly discounting will typically generate a higher property value as cash flows are assumed to be received throughout each year rather than at the end of each year.	All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
*Hold Period*	Integer	Defines the hold period for which property cash flows will be discounted in the calculation of the property’s value. The Hold Period determines the Sale Year.	All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
*Discount Rate*	% Entered as xx.xx	Rate of return used to determine the present value of future cash flows	All valuation calculations (specifically, in the Valuation Matrix, Hold Period Valuation, and Year over Year DCF Value sections)
*Terminal Cap Rate*	% Entered as xx.xx	Known also as the Resale, Reversionary or Residual cap rate, this rate is used to estimate the resale value (or Sale Price) at the end of the valuation term/hold period. Formula: Sale Price = NOI/Terminal Cap Rate	All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
*Cost of Sale*	% Entered as xx.xx	Allows the user to reduce the Sale Proceeds based on a defined percentage.	Reduces Sale Proceeds in the Hold Period Valuation; in turn, reduces Sale Price
*Purchase Price* (Optional)	$ Amount	Enter an alternative to the calculated NPV to be used as the Purchase Price in the transaction.	Affects IRR for the transaction; flows to the Debt Input and Waterfall tabs
*Closing Costs* (Optional)	$ Amount	Enter fixed amount for the closing costs	Affects IRR for the transaction; flows to Debt Input and Waterfall tabs
Reversion Sale Price Options
*Sale NOI Cap Year*	Sale Year or Sale Year + 1	Sale Year+1 caps NOI for the year immediately following the Sale year to determine sale price. Helpful Hint: “Sale Year + 1” is the default because when a property is sold, the price paid by the next investor is based upon an assessment of income for his/her expected period of ownership. Therefore, for the next investor, or potential buyer, the net operating income for his/her first year of ownership will be the year after we sell the property. This will be the first year of his/her investment. Sale Year caps NOI for the Sale year to determine the sale price. Helpful Hint: “Sale Year” should only be used if the net operating income for “Sale Year + 1” does not reflect stabilized occupancy and you either (i) don’t want to use the “Stabilize Reversion Vacancy Loss” option (see below) in the Valuation Settings; or (ii) don’t want to change your Valuation Term such that “Sale Year + 1” will reflect a stabilized net operating income.	All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
*Adjust Sale for Capital Items*	Yes or No	Yes: Reversion Sale Price at the end of the Hold Period is reduced by Capital Expenses for the year following the Sale Date. No: No Capital Adjustment Example: In a 10-year Cash Flow with a sale in Year 10, including capital items reduces the Sale Price by Year 11 Capital. This reflects costs that the next buyer will pay if they purchase the building.	Adds a capital expense adjustment to the Sale Proceeds section of the Hold Period Valuation on the Unleveraged Cash Flow tab; Adds capital adjustment (“Capital Adj”) to the Sale Summary on the Unleveraged Cash Flow tab.
*Gross-up Reversion Abatement*	Yes or No	Provides an option to add abatements (i.e., free rent) back into net operating income for the Reversion Cap Year. No: No adjustment is made to net operating income for Reversion Cap Year. Yes: Abatements are added back to net operating income for Reversion Cap Year. After capitalizing the adjusted net operating income, the resulting sale price is then reduced by the abatements that were added back to net operating income. The theory is that the seller is offering the buyer a sale price reduction (i.e., credit) for abatements during the buyer’s first year of ownership.	Adds a Gross-up Adjustment for Abatement to the Sale Proceeds section of the Hold Period Valuation on the Unleveraged Cash Flow tab; Adds Abatement adjustment (“Abatement Adj”) to the Sale Summary on the Unleveraged Cash Flow tab.
Reversion Adjustment	$ Amount	Provides an option to adjust the calculated direct cap value or the reversion sale price upward or downward in an amount specified by the user. For example, if a parcel of land is to be valued or sold as part of the valuation of an income producing property, enter the value of the land parcel in this field and it will be added to the direct cap value or the reversion sale price of the entire property.	Increases or decreases the calculated reversionary Sale Price and the total Sale Adjustments in the Sale Summary Section.
*Stabilize Reversion Vacancy Loss*	Yes or No	Provides an option to add back a portion of the vacancy allowance for a property (reflecting a combination of both General Vacancy Loss and Absorption & Downtime Vacancy) in order to reflect a stabilized vacancy loss in net operating income for the Reversion Cap Year. No: No adjustment is made to net operating income for Reversion Cap Year. Yes: If necessary, an adjustment is made to net operating income for the Reversion Cap Year to reflect a stabilized vacancy loss. The difference between (i) General Vacancy Loss plus Absorption and Downtime Vacancy; and (ii) Stabilized Vacancy Loss is added back to net operating income for the Reversion Cap Year. If the General Vacancy Loss plus Absorption & Downtime Vacancy is equal to the Stabilized Vacancy Loss, then no adjustment is made.	Adds a Stabilization  Adjustment for Vacancy Loss to the Sale Proceeds section of the Hold Period Valuation on the Unleveraged Cash Flow tab;
*Minimum Sale Price*	$ Amount	Sets a minimum sale price at the end of the hold period.	Overrides the calculated valuation sale price, if higher, in all valuation calculations
Metrics
Building Area	Month 1 or Year 1, Year 2, etc.	Building area is imported from rDCF. The user can select, in this field, which area to use for the valuation. Typically, you want to select a year that contains the stabilized Net Rentable Area.	Affects per square foot values in the Valuation Matrix and throughout the UW
Going in NOI	In Place or a specific Year	Use either the property’s “In-Place” income (as determined on the ”In Place” tab) or a specific year’s income to calculate the property’s going-in cap rate. The In-Place income may be preferred depending on year-end vacant lease-up.	Valuation Matrix and Purchase / Sale Summary
$/SF Calcs	In Place or a specific Year	Use either the property’s “In-Place” cash flow (as determined on the ”In Place” tab) or a specific year’s cash flow to calculate the property’s per square foot values  for display in the first column of the Property Cash Flow	Valuation Matrix and Purchase / Sale Summary
Valuation Matrix
Discount Rate Increment	% Entered as xx.xx	Establishes the increments used in the  Valuation Matrix for the selected Discount Rate. For example, if you enter a 10.00% Discount Rate in the Model Assumptions, and 0.50% increments, the matrix will display results for the Discount Rate at 9.00%, 9.50%, 10.00%, 10.50% and 11.00%.	Valuation Matrix
Terminal Cap Rate Increment	% Entered as xx.xx	Establishes the increments used in the  Valuation Matrix for the selected Terminal Cap Rate. For example, if you enter a 10.00% Terminal Cap Rate in the Model Assumptions, and 0.50% increments, the matrix will display results for the Terminal Cap Rate at 9.00%, 9.50%, 10.00%, 10.50% and 11.00%.	Valuation Matrix

*In a Folder UW, field should be edited on the Portfolio Valuation tab, not the Unleveraged Cash Flow tab.

In Place Tab

The In-Place tab provides (i) a snapshot glance of the suites and the leasing terms for all tenant records from rDCF; and (ii) calculations of base rent, recoveries and other income components as of the Underwriting Workbook “Report Begin Date”. On this suite-centric tab you can select which version of the lease you would like to include in your unleveraged cash flow as “In-place”. The default is the “Base” or beginning lease for the suite.

Helpful Hint: In-Place analysis typically includes all existing / contractual leases at the property as of the analysis begin.

For a Folder UW, property totals are displayed at the bottom of the worksheet.

Note: Screenshot is for illustrative purposes. Not all columns and fields are shown above.

In Place Tab Input Fields

Input Field Category /  Name	Input Options	Description	Impact on Model
Selection	Drop Down	Select which tenant records to include/exclude from the In Place calculation (shown on Unleveraged Cash Flow). For each suite select from the initial lease (“Base”) or subsequent modeled leases to be used for the In-Place cash flow on the Unleveraged Cash Flow tab. The square footage and rental calculation will change accordingly. This interaction provides a quick method of identifying current and future rental for loan sizing purposes.	The selections made on this tab will be identified on the Lease Detail tab. Cash Flow for the selected leases will be displayed in the In Place column for the Property Cash Flow on the Unleveraged Cash Flow tab.

Rollover Tab

The Rollover tab displays all leasing from the rDCF model comparing gross contractual rent to gross market rent on a tenant-by-tenant basis upon lease expiration, with a weighted average summary by expiration year.

This tab includes a variance section comparing expiring rent to the next rent. Reviewing the summary variance by year on a PSF and % basis allows a quick analysis of the magnitude of potential upside or downside in rents for a building or portfolio.

Notes:

1. The Rollover report should not be used as a lease expiration summary. It does not account for all renewal types. Leases with Renewal Type = None in rDCF will not be displayed. See the Expirations tab for complete expiration information.
2. Expiration and Next Rent boxes show unabated amounts for Rent & Recoveries regardless of leasing assumptions (i.e. free rent and recoveries are not included in the amounts)

  Rollover Tab Input Fields

Input Field Category /  Name	Input Options	Description	Impact on Model
Include	Drop Down	Select categories of leases to include in the totals. Lease selections include Base leases, In-Place Leases, Roll To Market, and All Rollover.	Changes on this tab do not impact other tabs, the cash flow, or valuation.

Portfolio Valuation Tab

The Portfolio Valuation tab is used in conjunction with the Unleveraged Cash Flow tab to calculate the contribution of each building within a Folder UW to overall value in the valuation matrix. This tab allows greater flexibility for scenario planning at a portfolio level. Here, you can elect to model the portfolio value using a set of assumptions for the portfolio or individual valuation assumptions for each property.

Valuation Assumptions box:

By default, the tab will display one set of assumptions for the portfolio in the Portfolio row. To change this and set individual property assumptions, you should delete the data on the Portfolio row for Discount Rate, Cost of Sale % and Ext Cap Rate. This will change the property cells for those columns from gray to blue opening the cells for data entry.

Default Input Screen

Upon deleting the 10.00% from each column on the Portfolios row, the property detail cells turn blue and are available for editing:

Note that Discount Rate, Cost of Sale %, Exit Cap Rate and Min Sale Price must be entered using the same methodology –all are either (1) entered with a Portfolio-level value or (2) with a property-level value. You cannot mix and match the data entry formats for these 4 columns.

The Purchase Price and Closing Costs columns must be entered either by property or by Portfolio; alternatively, these fields can be left blank. Purchase Price will default from the NPV calculation.  

In addition to the Valuation Assumptions discussed above, the Portfolio Valuation tab has a box for Model Assumptions which feeds the Unleveraged Cash Flow tab:

Portfolio Valuation Tab Input Fields

Input Field Category /  Name	Input Options		Description		Impact on Model
Model Assumptions
Adjust Sale for Capital items	Yes or No		Yes: Reversion sale price at the end of the Hold Period is reduced by Capital Expenses for the year following the Sale Date. No: No Capital Adjustment Example: In a 10-year Cash Flow with a sale in Year 10, including capital items reduces the Sale Price by Year 11 Capital. This reflects costs that the next buyer will pay if they purchase the building.		Adds a capital expense adjustment to the Sale Proceeds section of the Hold Period Valuation on the Unleveraged Cash Flow tab; Adds capital adjustment (“Capital Adj”) to the Sale Summary on the Unleveraged Cash Flow tab.
*Gross-up Reversion Abatement*	Yes or No		Provides an option to add abatements (i.e., free rent) back into net operating income for the Reversion Cap Year. No: No adjustment is made to net operating income for Reversion Cap Year. Yes: Abatements are added back to net operating income for Reversion Cap Year. After capitalizing the adjusted net operating income, the resulting sale price is then reduced by the abatements that were added back to net operating income. The theory is that the seller is offering the buyer a sale price reduction (i.e., credit) for abatements during the buyer’s first year of ownership.		Adds a Gross-up Adjustment for Abatement to the Sale Proceeds section of the Hold Period Valuation on the Unleveraged Cash Flow tab; Adds Abatement adjustment (“Abatement Adj”) to the Sale Summary on the Unleveraged Cash Flow tab.
*Stabilize Reversion Vacancy Loss*	Yes or No		Provides an option to add back a portion of the vacancy allowance for a property (reflecting a combination of both General Vacancy Loss and Absorption & Downtime Vacancy) in order to reflect a stabilized vacancy loss in net operating income for the Reversion Cap Year. No: No adjustment is made to net operating income for Reversion Cap Year. Yes: If necessary, an adjustment is made to net operating income for the Reversion Cap Year to reflect a stabilized vacancy loss. The difference between (i) General Vacancy Loss plus Absorption and Downtime Vacancy; and (ii) Stabilized Vacancy Loss is added back to net operating income for the Reversion Cap Year. If the General Vacancy Loss plus Absorption & Downtime Vacancy is equal to the Stabilized Vacancy Loss, then no adjustment is made.		Adjustment for Vacancy Loss to the Sale Proceeds section of the Hold Period Valuation on the Unleveraged Cash Flow tab
IRR/NPV Discounting	Annual or Monthly		Indicates calculation method to be used for IRR / present value calculation. Choose from Monthly or Annual Note: Monthly discounting will typically generate a higher property value as cash flows are assumed to be received throughout each year rather than at the end of each year.		All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
Reversion NOI	Sale Year or Sale Year + 1		Sale Year+1 caps NOI for the year immediately following the Sale year to determine sale price. Helpful Hint: “Sale Year + 1” is the default because when a property is sold, the price paid by the next investor is based upon an assessment of income for his/her expected period of ownership. Therefore, for the next investor, or potential buyer, the net operating income for his/her first year of ownership will be the year after we sell the property. This will be the first year of his/her investment. Sale Year caps NOI for the Sale year to determine the sale price. Helpful Hint: “Sale Year” should only be used if the net operating income for “Sale Year + 1” does not reflect stabilized occupancy and you either (i) don’t want to use the “Stabilize Reversion Vacancy Loss” option (see below) in the Valuation Settings; or (ii) don’t want to change your Valuation Term such that “Sale Year + 1” will reflect a stabilized net operating income.		All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
Hold Period	Integer		Defines the hold period for which property cash flows will be discounted in the calculation of the property’s value. The Hold Period determines the Sale Year.		All valuation calculations (found in the Valuation Matrix, Hold Period Valuation section, and Year over Year DCF Value section)
Valuation Assumptions
Include in Cash Flow	Yes or No		Choose which properties to include or exclude from the cash flow analysis.		Setting a property to “No, removes its cash flow from all cash flow tabs. The leasing tabs will still present the excluded property’s information, but it will not be aggregated with other properties. Exception: Occupancy completely excludes excluded buildings. NRA totals will exclude as well.
Purchase price	$ Amount		Enter either one portfolio Purchase Price on the Portfolio row or enter a Purchase Price for each property in the portfolio.		Unleveraged Cash Flow & Valuation Matrix
Closing Costs	$ Amount		Enter either one portfolio Closing Cost amount on the Portfolio row or enter a Closing Cost amount for each property in the portfolio.		Unleveraged Cash Flow & Valuation Matrix
Discount Rate	% Entered as xx.xx		Enter either one portfolio Discount Rate on the Portfolio row or enter a Discount Rate for each property in the portfolio. See note below		Unleveraged Cash Flow & Valuation Matrix
Cost of Sale %	% Entered as xx.xx		Enter either one portfolio Cost of Sale % on the Portfolio row or enter a Cost of Sale % for each property in the portfolio. See note below		Unleveraged Cash Flow & Valuation Matrix
Exit Cap Rate	% Entered as xx.xx		Enter either one portfolio Exit Cap Rate on the Portfolio row or enter an Exit Cap Rate for each property in the portfolio. See note below		Unleveraged Cash Flow & Valuation Matrix
Reversion Adjustment	$ Amount		Enter either one portfolio Reversion Adjustment on the Portfolio row or enter a Reversion Adjustment for each property in the portfolio, as needed.		Unleveraged Cash Flow & Valuation Matrix
Min Sale Price	$ Amount		Enter either one portfolio Min Sale Price on the Portfolio row or enter a Min Sale Price for each property in the portfolio. See note below		Unleveraged Cash Flow & Valuation Matrix

Note: Discount Rate, Cost of Sale %, Exit Cap Rate, Reversion Adjustment, and Min Sale Price must be entered using the same methodology – all are either (1) entered with a Portfolio-level value or (2) with a property-level value. You cannot mix and match the data entry formats for these 4 columns.