CRE Financial Model Generator

1. Core Mechanics & Scenarios

Dynamic Linking: All navy-coloured text represents live inputs. Changing any value instantly recalculates the entire model.
Investment Modes: Supports Development (incorporating construction draws and lease-up voids) or Income-Producing (NOI generated from day one).
Scenario Analysis: Built-in Base / Down / Up toggles. Market variables (rent, yields) vary by scenario; structural variables (debt, timing, budget) remain constant across all three.

2. Revenue & Asset Types

Office / Retail / Industrial: Rent psf × NLA × (1 − vacancy) − non-recoverable OpEx; both grow annually.
Residential / BTR: Gross rent − vacancy − management fees − unrecovered service charge voids (landlord leakage).
Hotel: (Rooms × ADR × occupancy + F&B) × (1 − mgmt fee − variable costs) − fixed costs.
Student / Car Park: Rate per bed/space × capacity × occupancy. Revenue grows annually; OpEx remains flat.
Data Center: Contracted critical IT load × colocation revenue, less unrecovered PUE-adjusted electricity and non-power facility costs. Net customer churn reduces contracted load over time.
Lease Incentives: Rent-free periods are spread linearly across the lease-up phase. Existing assets assume day-one passing rent with no void.

3. Capital Expenditure & Financing

Drawdown Priority: Strictly equity-first. All LP/GP equity is fully drawn before any debt facilities are utilised.
Development Finance: Auto-sized via LTC%. Interest PIK into balance, compounds monthly, with a bullet repayment at exit.
Investment Loans: Auto-sized via stabilised GAV × LTV%. Features an interest-only (IO) period followed by mortgage-style amortisation.
Covenant Tests: Monthly tracking of DSCR (NOI ÷ debt service), ICR, LTC, and LTV (informational only; triggers no cash sweeps).

4. Valuation & Returns

Exit Valuation (GAV): Based on a buyer's forward underwriting: Forward 12-month NOI ÷ Exit Yield.
Yield on Cost (YoC): First 12 months of stabilised NOI ÷ all-in cost (including purchaser's costs and capitalised interest).
Internal Rate of Return: Exact calendar-day XIRR and XNPV used for both levered and unlevered project returns.

5. Equity Waterfall

Equity Sizing: Total required equity equals the peak negative levered cash flow. LP and GP contribute pro-rata based on stated split.
Preferred Return: Tested against LP contributed capital plus cumulative accrued unpaid preference.
Carried Interest: GP receives promoted interest per band above the hurdle rate. No clawback provisions are modelled.

6. Tax & Fund Fees

Transaction Taxes: Stamp Duty deducted upfront on acquisition components; CGT applied at exit only if the project is profitable.
Ground Rent: Flat monthly deduction (assumes no upward-only or inflation-linked rent reviews during the hold period).
Management Fees: Dev Mgmt fees track monthly hard costs. Asset Mgmt fees are calculated as 1/12th of the annual rate × called capital (cumulative capex net of debt drawn).

7. Monte Carlo Risk Simulation

Sampling: Latin Hypercube Sampling (LHS) ensures uniform, statistically rigorous coverage of extreme tail risks.
Vectorised Compute: Uses 2D NumPy matrices to bypass Excel, calculating thousands of scenarios in milliseconds.
Risk Metrics: VaR (Value at Risk) and CVaR (Expected Shortfall) are strictly reported in absolute Net Profit (£), not as percentage returns.
Tornado Chart: Uses Spearman's rank correlation to measure each variable's monotonic impact on the Levered IRR.

8. Exclusions & Limitations

Does not model tenant defaults, mid-lease break options, or stepped rent reviews.
Does not model interest rate hedging, swap mark-to-market costs, or margin ratchets (all loan rates are fixed).

CRE Financial Model