Mixed-use deal analysis

Two rolls, one plate

• I keep the residential income and the commercial income apart until NOI.
• Residential gross potential rent is units times monthly rent times 12.
• Commercial gross potential rent is area times rent per square foot per year.
• Each line has its own vacancy.
• Other income is added once.
• Operating expenses are taken once.

That is the whole trick, and it is easy to lose in a spreadsheet that grew a tab at a time. The engine holds both lines in one pro forma, then prices the NOI, sizes the loan, and writes the verdict from that same run.

Worked example

• Cayuga Commons (Illustrative Case) in Ithaca, NY is the illustrative case the engine is locked to.
• It is 24 apartments at $2,400.00 a month, vacancy 6.00%, and 4,200 square feet of retail at $38.00 per square foot per year, vacancy 8.00%.
• The price is $8,500,000.
• The hold is 7 years.
• The exit cap is 6.50%.

• Rent growth on this case is 3.00% a year.
• Expense growth is 2.50%.
• The loan is 65% of price at 6.25%.
• Year 1 debt service is $408,220.50.

Where this pass simplifies

• Street retail under apartments often wants its own growth, its own vacancy path, and its own exit cap.
• This model uses one rent growth rate and one exit cap for the whole building.
• A named tenant roll is supported when the lease terms can be written in whole years.
• A term the model cannot represent is not rounded into a nearby year.

Those limits are on the mixed-use methodology page and the model boundaries.