New IC memo section: identifies the year NOI is within 2% of the year-3+ trailing-average (the 'settled' steady-state). Y1 vs stabilized NOI delta tells the IC how much of the deal's value lives in operations stabilization vs market rent growth. Band classification (stabilized at acquisition / early / mid-hold / late). Cherry Street's Y1 NOI is $594k, stabilizes at Y5 to $672k (13% uplift), a continuous-growth deal rather than a value-add ramp, which is what the band confirms.
Changelog, page 19
What shipped, and when.
A day-by-day record of what landed in Underwrite, kept by hand. Page 19 of 23.
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2026-05-14
11 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: capital sources ordered from most senior (senior debt = first paid, lowest cost) to most junior (LP equity = last paid, gets carry). Each layer shows $ amount, % of total stack, position label, and expected return. Stacked-bar visualization at the top gives the institutional 'what does the cap stack look like' view that LPs and lenders use to read a deal at a glance. Adapts when mezz / GP coinvest are active; layer count flexes from 2 (senior + equity) to 4 (senior + mezz + GP coinvest + LP).
New IC memo section (rent-roll deals only): NER = (gross rent over term - free rent dollars - TI/LC dollars) / (SF × term years). The institutional standard for comparing leases with different concessions. A $50/SF face with 6 months free + $40/SF TI on a 5-year lease is really ~$37/SF net effective. Plus SF-weighted summary stats: face rent, NER, and concession drag in basis points. Lets the IC see each tenant's true economics rather than the broker-quoted face rate.
New IC memo section: year-by-year annual cash-on-cash yield + running cumulative yield (% of equity returned through year N). Cherry Street's pre-exit cumulative yield is ~44% (interim CF returns less than half the equity check); total cumulative is ~244% (exit crystallizes the rest). The pre-exit-to-total split tells the IC how much of the LP's return is yield-driven vs appreciation-driven, useful framing for LP fit (yield-focused LPs want high pre-exit shares).
New IC memo section: asset-class-native operating efficiency benchmarks. Year-by-year NOI per unit (multifamily), NOI per key (hotel), or NOI per SF (office / retail / industrial). EGI and OpEx broken out per unit too, plus NOI growth CAGR. These are the numbers institutional brokers quote at broker tours ($/key on hotels, $/SF on logistics) and lenders benchmark when underwriting; having them surfaced explicitly on the memo bridges the gap between the deal-level pro forma and the asset-class-native comp tables.
New IC memo section: anticipates what a senior debt underwriter would internally risk-rate the deal at. Synthesizes DSCR thickness + Y1 debt yield + LTV vs policy + property type stability + refinance feasibility into a 1-10 rating (lower = better) with transparent component breakdown. Cherry Street prints 3/10 'Investment-grade': pristine DSCR, strong debt yield, mid-LTV, moderate property-type risk, strong refi optionality. Anticipates underwriter pushback before the sponsor approaches debt capital markets.
New IC memo section: reorders tornado entries by absolute IRR swing magnitude with priority tiers (critical / material / minor). Cherry Street's top 3 critical assumptions: Rent Growth (5.13 pp swing), LTV (3.77 pp), Exit Cap (3.75 pp). The IC team should verify those three assumptions first, then move to material (Vacancy, Interest Rate, OpEx Growth). Same underlying data as the tornado chart, presented as a ranked diligence priority list.
New IC memo section: forward cap = NOI / purchase price, year by year. The Y_hold forward cap vs the user-set exit cap surfaces the deal's implied cap shift directly. Cherry Street: Y7 forward cap ~8.6% vs exit input 6.5% = +210 bps cap compression priced in (aggressive). Pairs with the Cap Rate Spread analysis to give the IC a complete cap-rate-thesis view: are we underwriting cap compression, cap expansion, or cap-neutral?
New IC memo section: sweeps residential vacancy from current to +25 pp (retail scaled proportionally) and re-runs the full DCF at each level. Cherry Street loses ~300 bps of IRR per 500 bps vacancy spike; max feasible vacancy where DSCR still clears 1.25x is 11% (only 500 bps of operational headroom above current). The operational counterpart to the rate sensitivity curve: answers 'at what vacancy does this deal stop penciling for the lender?'
New IC memo section answers 'is leverage helping or hurting day 1?' Loan constant (P&I / loan) vs going-in cap rate (NOI / purchase). Positive spread = debt accretive from day 1; negative spread = leverage drags equity returns until rent growth or cap compression fixes it. Cherry Street prints loan constant 7.39% vs going-in cap 6.99% = -40 bps spread, turns positive in Y5 as NOI compounds. Critical day-1 leverage diagnostic that's standard institutional practice but rarely surfaced explicitly on memos.
New IC memo section: splits total MoIC into return-of-capital (1.0x baseline), operating component (interim distributions), and exit component (sale-driven profit). Cherry Street's 2.44x decomposes as 1.00x RoC + 0.44x operating + 1.00x exit (~70% of profit from exit). Same MoIC can come from very different shapes: 'exit-heavy' (>75% from sale) is a flip, 'balanced' (40-75%) is typical CRE, 'yield-heavy' (<40%) is income-driven. Complements the IRR decomposition with a dollar-multiple view.
2026-05-13
4 entries
Monte Carlo, Deal Strength composite score, sensitivity curves, break-even cushions, risk-adjusted returns, tenant concentration, hotel ops overlay, GP coinvest sweep, debt sizing optimizer, NOI decomp, a below-NOI leasing-capex parser, and 15 more analytics. The day the memo went from 'pro forma + waterfall' to 'institutional IC packet.'
New IC memo section (fires on rent-roll deals only): surfaces largest tenant's % of total Y1 rent, top 3 tenants' combined %, and the maximum single-year rollover concentration. Risk tier (low / moderate / high) maps to institutional norms (>50% on either single-tenant share or single-year rollover = high). Pine Tower's 4-tenant office example produces a useful moderate-tier read: Apex Capital carries the biggest rent share and the bunched lease start years concentrate rollover in years 4-8.
New IC memo section: Y1 OpEx % of EGI compared to the typical institutional band for the property type (Multifamily 40-50%, Mixed-Use 35-50%, Office 30-45%, Retail 25-40%, Hotel 60-78%, Industrial 12-25%). Flags in-band, above-band, or below-band with a plain-English interpretation. Below-band can mean efficient operations or under-budgeted; above-band means padding or operationally-heavy management. Quick sanity check that the validation logic doesn't catch on its own.
New IC memo section: Sharpe-like ratio = (project IRR - 5% risk-free) / Monte Carlo stdev, plus raw IRR/stdev and a downside ratio (IRR / |P10 - IRR|). Cherry Street prints Sharpe 3.86 ('Strong'), IRR/stdev 5.73, downside ratio 2.67, all institutional indicators of a deal with meaningful excess return per unit of variance. Standard portfolio analytics applied to the Monte Carlo distribution; complements the headline IRR with a risk-adjusted view that LPs running Sharpe-aware allocation use.
New IC memo section: measures the year-over-year volatility of operating CF (NOI - leasing capex) via coefficient of variation, mapped to a 0-100 stability score with qualitative band (Very Stable / Stable / Variable / Lumpy). Cherry Street scores 100/100 'Very Stable', smooth compounding of rent + expenses with no rent-roll lumpiness. Useful framing for LP fit: insurance / pension capital favors high stability, opportunistic LPs accept Lumpy in exchange for upside.