New IC memo section: classic CRE valuation ratios. GIM = Price / GPR (gross potential), EGIM = Price / EGI (post-vacancy), NIM = Price / NOI (= 1 / cap rate). Cherry Street prints GIM 9.49x, EGIM 10.10x, NIM 14.31x, all in-band for Mixed-Use (EGIM 9-13x, NIM 14-20x). Useful sanity check alongside cap rate: a deal with normal cap rate but outlier multipliers signals an OpEx structure that's misaligned with peer asset class; e.g. a hotel with a multifamily-style EGIM means operating leakage somewhere in the model.
Changelog, page 18
What shipped, and when.
A day-by-day record of what landed in Underwrite, kept by hand. Page 18 of 23.
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2026-05-14
15 entries
Phase 3 begins: live market data overlay (FRED Treasury / SOFR / CPI / inflation expectations) + 18 more institutional analytics. Live macro frame, deal-vs-market positioning, deterministic engine guarantee preserved (Cherry Street regression byte-identical with seeded fallbacks). 90 modules shipped today.
New IC memo section: strips inflation out of the nominal cap rate to show the deal's purchasing-power yield. (1 + nominal cap) / (1 + 3% inflation) - 1. Cherry Street: nominal entry 6.99% → real 3.87%; stabilized 7.43% → 4.30% (strong band). Companion to the Real IRR view applied at the cap-rate level rather than the IRR level. ≥4% real cap is strong, 2-4% standard, 0-2% thin (rent growth must outpace inflation to clear), below 0% means the deal's return lives entirely on real-rent growth.
New IC memo section: compares the deal's price per unit / per SF / per key to estimated replacement cost (dollars to build a comparable asset from scratch today). Asset-class construction bands: Multifamily $250-450k/unit, Office $300-600/SF, Hotel $200-500k/key, Industrial $90-180/SF, etc. Cherry Street prices at $354k/unit vs $390k mid-replacement = 90.8% of replacement, 'at-replacement' status. Institutional read: deals below replacement are structurally safer (new supply uneconomic); deals above replacement need real barriers-to-entry to sustain rent premium.
New IC memo section: ICR = NOI / interest expense only (excludes principal). Distinct from DSCR which uses total debt service. The metric bondholders, CMBS surveillance teams, and interest-only-loan underwriters care about. Bands map to Moody's / S&P CMBS rating conventions: ≥3.0x strong, ≥2.0x investment grade, ≥1.5x watch, <1.5x distressed. Cherry Street Y1 ICR 1.73x (watch band; the deal has thinner interest coverage than its 1.46x DSCR would suggest at first glance).
- engine
New IC memo section: year-by-year schedule of LP cash flows tied to actual calendar dates anchored to the deal's acquisition date. Capital call at Y0, operating distributions Y1-Y(hold-1), exit distribution at Y_hold. Summary stats: total capital calls, total operating distributions, total exit, net to equity. Useful for LP liquidity planning: fund-level cash flow forecasting needs both expected capital commitments AND distribution timing.
New IC memo section: at exit year, surfaces both paths' cash-to-equity numbers. Cherry Street can sell ($6.08M to equity from net sale - debt payoff) OR refinance at 65% LTV against market value ($2.40M cash-out, asset retained for future hold). Sell advantage: +$3.68M, framing 'sell preferred.' Doesn't compute future-IRR-equivalents for the refi path (that's Phase 2); just the immediate cash trade-off. Standard sponsor decision tool, now surfaced on the memo so the IC sees it explicitly.
New IC memo section: strips the inflation tailwind out of the nominal IRR to show the LP's purchasing-power return. At a 3% CPI default, Cherry Street's 15.34% nominal becomes 11.98% real (336 bps inflation drag). Also computes real MIRR and (when tax overlay is enabled) after-tax real IRR. Standard institutional analysis especially relevant in any non-zero-inflation regime: the nominal headline IRR overstates what the LP actually keeps in purchasing-power terms.
New IC memo section: cap rate minus 10-year Treasury (4.5% mid-2026 proxy), the institutional 'is this CRE deal even better than risk-free?' sanity check. Cherry Street stabilized cap 7.43% over 10Y of 4.5% = +293 bps spread, 'standard' band. Framing: strong (≥400 bps), standard (250-400), thin (100-250), tight (<100; returns hinge on cap compression). Useful for treasury teams and capital allocators benchmarking CRE vs fixed income.
New IC memo section overlays a typical institutional sponsor fee structure on the engine's pre-fee cash flows: acquisition (1% of purchase), asset mgmt (1.5% of LP equity / year), disposition (1% of sale). Cherry Street: pre-fee 15.34% → post-fee 13.43%, fee drag 191 bps, total fees $532k over hold. Surfaces the difference between the deal's gross math and the LP's net-of-fees experience; the headline IRR is rarely what an LP actually pockets.
New IC memo section: blended cost of capital across senior debt + mezz (when present) + equity (priced at the 15% institutional CRE hurdle, representing what NEW capital would expect to earn). Project IRR vs WACC spread = whether the deal beats market hurdle rates. Cherry Street WACC 9.46% vs project IRR 15.34% = +588 bps spread, accretive. Standard corp finance metric applied to CRE: gives the IC a clear 'are we creating value over capital cost' read.
New IC memo section: extends the Monte Carlo distribution into risk-officer-style downside metrics. Probability bands at multiple IRR thresholds (loss, below pref, below 12%, above 15%, above 20%, above 25%) plus tail statistics (worst-of-1,000, P1, P5, CTE5 = avg of worst 5%). Cherry Street's downside profile: 0% chance of capital loss, 3.9% chance of underperforming pref, 23.7% chance of clearing 15%, worst case 3.45% (still positive). LP allocators who think in terms of tail magnitude (not just probability) now have the metrics surfaced explicitly.
New IC memo section: scores the deal against five institutional LP archetypes (Insurance/Pension Core, Sovereign Wealth, Pension Fund-of-Funds, Family Office, Opportunity Fund) on three dimensions: target IRR band, CF stability tolerance, hold-period preference. Each archetype gets a 0-100 fit score with rationale. Cherry Street fits Pension Fund-of-Funds and Family Office (100/100), Sovereign Wealth (83), Insurance Core (73), Opportunity Fund (63), pointing to mid-tier institutional capital as the natural buyer. Helps sponsor positioning: don't pitch a 15% IRR core deal to an opportunity fund chasing 25%+.
New IC memo section: price per SF / per unit / per key (asset-class-native) compared to mid-2026 institutional transaction comp bands. Multifamily $200k-500k/unit, Office $200-700/SF, Hotel $120k-400k/key, Industrial $100-300/SF, etc. Status flagged in-band / above (needs upside story) / below (diligence the discount). Cherry Street's $354k/unit sits in the middle of the Mixed-Use $250k-550k band. The first 'is this a fair price' check that every broker conversation revolves around, now surfaced explicitly on the memo.
New IC memo section: tracks operating margin year-by-year + Y1 → exit expansion in pp + trend classification (expanding / stable / compressing). Expanding margin = operating leverage is working (revenue grows faster than expenses); compressing = expense inflation eats operating returns. Pair with NOI Decomposition for the full picture: NOI Decomp shows the dollar Δs; this view shows whether those Δs translate into improving or deteriorating operating efficiency.
New IC memo section: measures how comfortably each year's operating CF covers the LP's preferred return on contributed equity. Cherry Street's pre-exit DCR is 91.5% (interim CF covers ~92% of the cumulative pref obligation through Y6); total DCR including exit is 435%. Below 100% pre-exit = some pref accrues unpaid and is made whole from the sale; above = pref is fully serviced through operations. Tells the IC how much pref accrual the deal leans on the exit sale to clear.