Day 186 of posting a deal a day until I get a new role

Travel day so will be some commentary on a deal I was on last month… makes me think that value add investors in big cities / prestigious assets are a paradox…

Will talk through how underwriting commercial value add can be a trap🧵 Asset description

- 240k sf office, pretty nice but dated interior

- 80k sf in vacancy for various reasons partially due to deleasing strategy as we focused on other assets in portfolio

- a value add investor’s eyes light up because they can lease up 80k sf at $40 net and juice some insane returns not to mention all the fees you can slide through

Day 126 of posting a deal a day until I get a new role in CRE / Investments / Special Sitatuations🧵

Today I am doing an intro on recoverable amortization. @ClarenceWongCRE feel free to jump in

This is an office building we are selling and I am refreshing the model to reflect amortization.

I am doing this to accurately reflect cash flows and make sure our value is as high as possible 1) wtf is amortization and why am I tracking it?

- Let's say we replace the HVAC. We pay this (as the landlord) on day 1 however, for office leases you can actually recover this cost

How does this get recovered?
- you will amortize the cost over x months

Simple example:
- 100k hvac repair , depreciates over 10 years so you charge your tenants 10k / year until you recover it back

- you are also allowed to charge the tenants interest (depends on the lease) so you actually end up recovering over 100k

- this is table stakes and allowed in CRE leases (especially office)

- so we need to figure out how we amortize it e.g. the term, and the amount so I can figure out how much we can recover from tenants

- this is a cash inflow

Day 120 of posting a deal a day until I get a new role🧵

Today, I am back to an office case study:
1) what was easy
- operating model is very simple you just take the given rent and grow it 3% a year
- opex is fixed and variable, fixed grows with inflation and variable is based on gross rent
- leasing costs are static numbers based on square feet and previously calculated rent
- for sale, you can just assume an exit cap rate and go from there

Day 113 of posting a deal a day until I get a new role.

I found a simple case study online and wanted to see if I could solve it in under 20 minutes. I will walk you through how I solved it and what else you need to know to work through commercial deals. 1) Why this is going to be easy
A) single tenant and the hold period is less than the lease term
- this means that there is no market leasing assumptions, no turnover, no LC, no TI's, no renewal probability
B) There is no capex, deferred maintenance, etc so NOI is a proxy for ULFCF
C) they gave us net rent and only gave us "non recoverable opex on a psf basis"
- this means that we don't ahve to calculate additional rent, operating expenses, or management fees
- we only need to take net rent as a proxy for total rent and some non recoverable to get to NOI

Day 111 of posting a deal a day until I get a new role in CRE / Investments / Value Add

Today's deal is a non performing loan in Texas. I would foreclose and lease up this industrial space 1 mile from the airport. The bank wants this off their book. Most people think it's worth nothing but I see upside.
1) key deal info

- non-performing loan of an industrial asset in Corpus Christi, Texas.

- through the note I would acquire the underlying real estate at a significant discount to its replacement cost.

- The loan is in default, and a Summary Judgment was granted in September 2025. The borrower is in liquidation, creating a clear path to ownership.

Day 79 of posting a deal a day until I get a new role in the investments / CRE space.🧵

Today's "deal" is about portfolio optimization and accretive capital allocation. I want to show you how you decide what assets to sell when you need to pay down debt and which assets to never sell. Situation
- let's assume you own 5 properties worth around $160k but you have $100k in corporate level debt (not property level)
- interest rates have just risen to 5% and your Debt/NOI is at 11x and your NOI to interest is 1.8x
- you need to pay down debt to get to 8x Debt/NOI to maintain lender relationships and reduce risk

As promised @CaseyMericle , here is my day 6 Deal Analysis of doing a deal every day until I land a new job in Real Estate.

Today I break down this deal, stress test scenarios, and explain the RE option strategy Casey references. This is how you turn a -1.4% deal into a 52% deal 🧵 Snapshot:
Vacant 6,912 SF freestanding retail box in North Phoenix, built 2017. Priced like it is already leased, not like a vacant asset that still has to earn its way to stabilization.

Basically, they can't lease it up because they don't want to spend money on leasing costs (free rent, leasing commissions, Tenant Fit Out etc)

(Had to use Casey's images because no longer on market)

Where I see the most value in Commercial Real Estate: Top Industrial markets with overblown vacancy risk with Value Add upside. Let's look at a deal to see why. This will be the most comprehensive analysis you see today🧵 Let's look at Camp Creek in Atlanta Georgia.

Here are the quick facts:
- New, Class A, 220k SF, leased to a top healthcare tenant
- Value add = 70k sf bay of vacancy, and an unutilized IOS Site(@rohde88 😉)
- The current tenant is a credit worthy healthcare tenant with 10 year lease increasing 3.5% a year