This model has undergone dozens of changes since I released this video, and so I've created a new walk-through of the ORI-RR tab. You can find that here: czcams.com/video/kKmSXUkE45A/video.html
Great stuff. Quick question: the rent escalations don't increase based on month of rate change? For example if a tenant has rent of $20 with 3% escalation in September, but my model starts in January it seems like the rent increase will not hit until the following January rather than in September. Am i seeing that right?
Hey Spencer - on the operating statement tab, Gross Potential Rent is the greater of either the Market or Contract/Spec rent. Is it standard industry practice to do it this way? Also on the same tab, the Loss-to-Market cells seem to reference blank cells. Is that something that you're planning to update in future versions? Thanks.
Hi Yves, sorry for the delayed response. To your first question, you're correct that the Gross Potential Rent is equal to the greater of market rent and contract rent - and for Office, Retail, and Industrial underwriting that is atypical. It is common in Multifamily underwriting. How the calculation works is the Gross Potential Rent less Downtime Vacancy/Loss-to-Market equal actual rent. Doing it this way allows you to see how much income is being lost to not just actual vacancy, but to undermarket lease rates. It's also how I'm calculating economic vacancy. To your second question, I'm not sure I follow. The Loss-to-Market cells don't (or at least they shouldn't!) reference blank cells. Would you mind pointing to the cells you're specifically speaking of and if there's an error I'll fix it in the next version. Thanks for watching!
Thanks, I think I see how that works now. Regarding my second question, the cells I was referring to are on row 61 of the "O-OpSt" tab. Their formulas seem to reference row 10 on "O-Calc" (Contract/Spec rent schedule). For example, cell J61 on O-OpSt references cell ACC10 on O-Calc which seems to be blank. Looking forward to watching your latest video!
Zoran, took your advice and bought myself a new iBlue mic - thanks for the suggestion! You can hear the much improved quality in my latest All-in-One video: czcams.com/video/ZM0n1srDn9Q/video.html
![All-in-One Model Walkthrough 2 - Office Retail Industrial Rent Roll Tab [Updated]](http://i.ytimg.com/vi/kKmSXUkE45A/mqdefault.jpg)
![All-in-One Model Walkthrough 2 - Office Retail Industrial Rent Roll Tab [Updated]](/img/tr.png)
This model has undergone dozens of changes since I released this video, and so I've created a new walk-through of the ORI-RR tab. You can find that here: czcams.com/video/kKmSXUkE45A/video.html
Great stuff. Quick question: the rent escalations don't increase based on month of rate change? For example if a tenant has rent of $20 with 3% escalation in September, but my model starts in January it seems like the rent increase will not hit until the following January rather than in September. Am i seeing that right?
Hey Spencer - on the operating statement tab, Gross Potential Rent is the greater of either the Market or Contract/Spec rent. Is it standard industry practice to do it this way?
Also on the same tab, the Loss-to-Market cells seem to reference blank cells. Is that something that you're planning to update in future versions?
Thanks.
Hi Yves, sorry for the delayed response. To your first question, you're correct that the Gross Potential Rent is equal to the greater of market rent and contract rent - and for Office, Retail, and Industrial underwriting that is atypical. It is common in Multifamily underwriting. How the calculation works is the Gross Potential Rent less Downtime Vacancy/Loss-to-Market equal actual rent. Doing it this way allows you to see how much income is being lost to not just actual vacancy, but to undermarket lease rates. It's also how I'm calculating economic vacancy.
To your second question, I'm not sure I follow. The Loss-to-Market cells don't (or at least they shouldn't!) reference blank cells. Would you mind pointing to the cells you're specifically speaking of and if there's an error I'll fix it in the next version.
Thanks for watching!
Thanks, I think I see how that works now. Regarding my second question, the cells I was referring to are on row 61 of the "O-OpSt" tab. Their formulas seem to reference row 10 on "O-Calc" (Contract/Spec rent schedule).
For example, cell J61 on O-OpSt references cell ACC10 on O-Calc which seems to be blank.
Looking forward to watching your latest video!
Hi Spencer,
Any chance to improve the quality of your sound recording?
Hi Zoran, appreciate the feedback. I'll look into purchasing a new microphone for future videos.
Zoran, took your advice and bought myself a new iBlue mic - thanks for the suggestion! You can hear the much improved quality in my latest All-in-One video: czcams.com/video/ZM0n1srDn9Q/video.html