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This is the fourth course in the 16-course Accelerator and a companion to course 3. Anatomy of the Real Estate DCF. In this  mini-course, you will continue where you left off with the Lakefront Industrial I hold/sell analysis case. Taking the DCF model you built from scratch, you will calculate other important risk and return metrics to complete your analysis.

The concepts learned in course 3. Anatomy of the Real Estate DCF, together with those learned in this course, provide the framework for building more sophisticated acquisition, development, and value-add models later in the Accelerator.

In this course you will learn to calculate:

  1. Unlevered and Levered IRR (annual and non-annual periods)
  2. Unlevered and Levered Equity Multiple
  3. Free and Clear Return and Cash-on-Cash Return
  4. Net Profit
  5. Average Rate of Return
  6. Operating Expense Ratio
  7. Expense Recovery Ratio
  8. Economic and Physical Occupancy

In addition, we will show a technique for partitioning the IRR and Equity Multiple.


Continuing the case from course 3, you are a member of A.CRE Advisors’ asset management team. You are personally responsible for managing 17 industrial assets. Your assets consist largely of bulk warehouses built in this cycle (i.e. since 2010) for e-commerce and logistics tenants.

The assets are all held within an open-end core fund, with no expressly defined fund termination date. The strategy is to provide consistent long-term income to the investors, while timing acquisitions and dispositions so as to maximize overall returns and beat the NFI-ODCE index.

In a recent conversation with your portfolio manager, he mentions that the acquisitions team is looking at an exciting industrial opportunity. However, he doesn’t want to add another industrial asset to the fund without identifying an equally attractive disposition opportunity. Lakefront Industrial Building 1 comes up as a potential disposition target, and so you commit to doing a hold/sell analysis on the property.

You’ve built a 10-year discounted cash flow model forecasting the projected cash flows for Lakefront Industrial Building I were you to hold the asset long-term. You also quickly calculated the unlevered IRR of that scenario. You’ve now been asked to analyze the hold scenario further and calculate a few more risk and return metrics to help your Portfolio Manager make a more informed decision.


  • Industrial; concepts apply to all property types


  • While we recommend using Microsoft Excel, as that is the industry standard, this course will work with most other spreadsheet software such as Google Sheets and OpenOffice Calc


  • The course assumes you have at least an intermediate proficiency working with Microsoft Excel, Google Sheets, or OpenOffice Calc


User Avatar Spencer Burton

Spencer Burton is currently President and member of the founding team at Stablewood, a data-infused multi-strategy institutional real estate investor that combines the best of traditional real estate investment with proprietary data analytics and machine learning. Spencer has over 20 years of real estate experience, both as a fiduciary and principal. Over his career, Spencer has helped close $5+ billion and underwrite $30+ billion of commercial real estate at some of the largest institutional real estate firms in the world. He has worked in land brokerage, residential development, commercial real estate acquisitions, debt production, and Investment Manager for a $60 billion institutional real estate investor. Spencer is also the co-creator of AdventuresinCRE.com, the industry’s go-to place for commercial real estate financial modeling, education, and career advancement resources. He is also the author of various AI-powered CRE tools and an expert on the practical application of generative AI in commercial real estate. Spencer Burton holds a Bachelor of Arts in International Affairs with an emphasis in economics from Florida State University and a Masters in Real Estate with a concentration in finance from Cornell University.