Entries by Michael Belasco

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30/360, Actual/365, and Actual/360 – How Lenders Calculate Interest on CRE Loans – Some Important Insights

(Updated August 7, 2019 to include a Watch Me Build video and Downloadable file) Commercial real estate lenders commonly calculate loans in three ways: 30/360, Actual/365 (aka 365/365), and Actual/360 (aka 365/360). Real estate professionals should be aware of these methods if they want to understand the real interest rate as well as the total amount of interest […]

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A.CRE Hotel Valuation Model in Excel (Updated 07.23.19)

I am excited to introduce our new Hotel Valuation (Acquisition) Model to underwrite both stabilized and value-add hotel opportunities. This hotel pro forma is designed to allow users to do everything from a quick back of the envelope exercise to a fulsome and detailed underwriting exercise in which the user can get into the weeds […]

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Through The Entitlement Process: Identifying Risks and Strategies For Mitigation

Investing in and developing an unentitled site, broadly speaking, is one of the riskiest, yet rewarding, endeavors in the commercial real estate industry. The entitlement process, in particular, is fraught with the potential for setbacks and even failure, all while significant money needs to be spent and put at risk long before any revenue can […]

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Deep Dive: Understanding Acquisitions: The Letter of Intent (LOI)

The Letter of Intent – Legal Issues The letter of intent is a critical document that is written up at the beginning of a potential real estate transaction between either a prospective buyer and seller or a prospective tenant and landlord. The LOI contains preliminary understandings between both parties about major points of interest and concerns […]

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Hotel Proforma Basics – Hotel Cash Flow Projection

Hotels are a unique asset in the commercial real estate world and are underwritten differently as a result. Probably the most obvious difference is the duration of the ‘lease term’ of the tenant, which is usually daily to weekly. Another major difference is that hotels are more operating intensive and typically contain other complimentary services […]

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Back-of-the-Envelope Office, Retail, Industrial Acquisition Model (Updated 10.1.2018)

I’ve built a new acquisition model that I am excited to share with our readers. This is a back-of-the-envelope (BOE) valuation model that can be used for retail, office, and industrial properties. The goal was to create a sleek and clean look to the model that would enable a third party to easily understand what […]