How Underwrite handles Industrial.
Industrial is the post-2020 darling of CRE. The engine handles industrial as an NNN-style asset: base rent per SF, with tenant-paid expense recoveries (CAM, taxes, insurance) flagged in notes rather than modeled as a separate revenue stream. Operating Snapshot surfaces Rentable SF, Rent / SF / Yr, Vacancy, Cost / SF, and Y1 NOI / SF. Property management runs unusually thin (0.5-4%) because landlords don't actively operate single-tenant warehouses.
What the engine surfaces natively
On any Industrialdeal, the in-tool Operating Snapshot replaces generic schema labels with the asset class's native vocabulary:
- Rentable SF. Total leasable industrial / logistics square footage. Stored in retailSF schema slot.
- Rent / SF / Yr. Base rent in dollars per SF per year, NNN basis (tenant pays expense recoveries separately).
- Vacancy. Stabilized vacancy. Long-WALT NNN industrial typically runs 3-5%.
- Cost / SF. Purchase price divided by SF. Industrial averages $70-200/SF nationally; coastal logistics $200-400/SF.
- Y1 NOI / SF. NOI per SF, useful for comparing across deals at different scales.
Property-type-aware validation bands
Validation guards in lib/engine/validation.ts use these tighter bands for Industrial instead of the generic defaults:
- Property management % of EGI: 0.5-4%. Triple-net leases shift expense responsibility to the tenant; landlord operations are minimal. 2% is typical.
Asset-class stress scenarios
The ScenarioBar surfaces these stress overlays when Industrial is the current property type:
- Industrial Cap Expansion. Exit cap +150bps, rent growth -100bps. Industrial saw historic cap compression in 2020-2022; mean-reversion is a real risk if rates stay elevated or supply unwinds.
- All four generic stress scenarios (Base, Recession, Rate Spike, Aggressive) are also available on Industrial deals.
Example deal: Cedar Logistics Center
The Industrial pre-built example computes to the headline values below. Click into the tool to edit any input and watch the engine recompute live, or open the IC memo to see the full deterministic output.
Current model boundaries for this asset class
These are the Industrial-specific institutional features Underwrite deliberately routes to analyst review today. The full list across all asset classes is at /methodology/beyond-phase-1.
- NNN expense passthroughs are not modeled as a separate revenue line. The engine treats industrial rent as base rent only; recoveries flow outside the model.
- Lease escalations are aggregated into the single rent-growth input. Real industrial leases have 2-3% annual bumps written in.
- Expansion options and sale-leaseback structures are not modeled.
- Cold storage / specialty industrial uses the generic preset; real underwriting differentiates by clear height, dock-door count, and refrigeration load.