Why We Publish Our Underwriting Assumptions

Most sponsors hide their underwriting assumptions. They show the deal results. They do not show the inputs.

We publish ours. Here is why and what we publish.

The Industry Norm

Investor decks show projected returns. IRR. Equity multiple. Cash on cash. These are outputs.

They rarely show the assumptions behind those outputs. What rent growth was assumed. What exit cap was used. What expense growth was modeled.

LPs evaluating the deal cannot reverse engineer the outputs without knowing the inputs. They are taking the projections on faith.

What We Publish

Rent growth assumptions by year. Submarket historical context. Our specific projection.

Expense growth assumptions. Real estate tax. Insurance. Repairs. Utilities. Property management.

Vacancy assumption. Stabilized and during lease up.

Capex budget. Year by year breakdown. What gets done when. Why.

Debt assumptions. Rate. Term. Amortization. Refinance scenarios.

Exit cap rate. Current submarket comp range. Our projection. Sensitivity analysis.

Why This Matters

Sophisticated LPs can compare our assumptions to their own market research. They can identify where we are aggressive and where we are conservative.

They can stress test the deal independently. They can see how sensitive the returns are to each assumption.

This transparency invites scrutiny. We welcome it. The deals that survive scrutiny are the deals we want to invest in too.

The Pushback We Get

Some sponsors say publishing assumptions invites criticism. LPs will pick apart every input. The numbers become a debate.

Our view. If the assumptions cannot survive examination, they should not be in the underwriting. The criticism is the test.

If our assumptions are defensible, sophisticated LPs respect the discipline. If they are not defensible, we need to know before we close the deal, not after.

The Competitive Effect

Sponsors who publish assumptions create pressure for other sponsors to do the same. Over time, the industry standard moves toward transparency.

This benefits LPs across the board. It also benefits operators who are running disciplined underwriting. The marketing competitors get exposed. The substance competitors stand out.

How We Format It

Every offering includes a one page assumptions summary. Each assumption with a brief explanation.

The full underwriting model is available on request to qualified investors. Anyone can see the math behind the projections.

This is not common practice. It is the practice we believe should be common.

The Investor Standard

Investors should ask every sponsor for the underwriting assumptions. Specifically. In writing.

Sponsors who provide them are inviting scrutiny. Sponsors who deflect are hiding something. Pick which kind you want to invest with.