In this Watch Me Build video I reveal you how to build a custom lease schedule module for long-lasting leases. The foundation of the module is an easy INDEX/MATCH combination that takes a lease schedule and models the rent cash streams throughout the entire hold period.

I likewise consist of an optional file that you can download and utilize to follow in addition to the video. That file consists of both a 'Template' and 'Completed' tab. You're likewise welcome to take the finished variation, and integrate it directly into your own model.

Are you an Accelerator member? See the 'Modeling Short-Term and Long-Term Leases course in the curriculum. Additionally, if you're an Accelerator Advanced Member examine out course 4, lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' recommendation for extra methods for modeling leases. Not yet an Accelerator member? Consider signing up with the genuine estate financial modeling training program used by leading realty business and elite universities to train the next generation of CRE professionals.

A lease schedule is a table that lists out the base rent by date. So for example, the lease schedule for a 75,000 SF spaced leased to an industrial on a 7-yr lease with 0.15/ SF bumps every year.

Rent/Yr

- Jan 1, 2018 - $337,500. Jan 1, 2019 - $348,750. Jan 1, 2020 - $360,000. Jan 1, 2021 - $371,250. Jan 1, 2022 - $382,500. Jan 1, 2023 - $393,750

The rent schedule is consisted of in the lease to describe the base rent paid by the tenant. So utilizing the rent schedule above, we know that the occupant pays $382,500 lease in 2022 ($ 31,875/ month). The rent schedule therefore ends up being a crucial input for modeling the prospective rent of a residential or commercial property.

A lease schedule module belongs of a realty design that anticipates the possible rental earnings over the hold period. So utilizing the example above, the rent schedule module would take the rent schedule and determine exactly the rent for every period. And preferably the module would do this in a vibrant method.

The module will include a rent roll noting the significant inputs for each tenant. So for circumstances, the rent roll would include renter name, suite, leased location, lease start date, lease end date, current lease, and so on. Each renter would then have a lease schedule that describes how the base rent changes with time.

The module then takes the lease roll, the rent schedule, and designs the real capital for each duration.

Quick Note: Not thinking about DIY analysis? Consider working with A.CRE Consulting to manage your bespoke modeling job.

Watch Me Build Video - Partitioning the IRR in Real Estate

So in this Watch Me Build video, I show you how to develop a lease schedule module for a long-lasting lease. I first drop in an export of a rent roll. From there, I include a rent roll for a single renter (National Insulation, Inc.) and link the relative info from the lease schedule to the rent roll.

Next, I design out the lease by month over a 132 month analysis duration. I use boolean reasoning to only model lease in durations where the lease is in force. And I utilize an INDEX/MATCH mix to draw in the rent from the rent schedule based upon the duration.

The result is a quick and basic method to dynamically design a rent schedule.

Download the Rent Schedule Module Exercise File and Module

To make this tool available to everybody, it is offered on a "Pay What You're Able" basis with no minimum (enter $0 if you 'd like) or maximum (your support helps keep the content coming - typical real estate Excel modules cost $100+ per license). Just enter a cost together with an email address to send out the download link to, and then click 'Continue'. If you have any questions about our "Pay What You're Able" program or why we provide our models on this basis, please connect to either Mike or Spencer.

We routinely update the model (see variation notes). Paid contributors to the design receive a brand-new download link by means of email each time the model is updated.

Bonus: Watch Me Model Rent Schedule Cash Flows Using AI

In this fast bonus video, I utilize ChatGPT to model the monthly capital for this same lease.

Frequently Asked Questions about Modeling a Rent Schedule in Excel and with AI

What is a rent schedule?

A lease schedule is a table that lists the base lease by date across the lease term. For instance, it might reveal annual lease increases for a tenant on a long-lasting lease, such as $337,500 in 2018, $348,750 in 2019, and so on. It ends up being an essential input for modeling rental income.

What is a lease schedule module?

A lease schedule module belongs of a realty model that anticipates rental earnings over the hold period. It uses renter lease information from the lease roll and a lease schedule to model rent cash flows dynamically for each analysis period.

How is rent designed throughout time in this module?

Rent is modeled utilizing a 132-month analysis duration. Boolean logic makes sure rent is just shown when the lease is active. An INDEX/MATCH formula is then utilized to pull the right lease from the rent schedule based upon the duration.

What Excel methods are used in the lease schedule module?

The model mainly utilizes the INDEX/MATCH combination to pull lease worths and boolean logic to limit rent streams to the lease period. These formulas guarantee the module stays vibrant and scalable for longer leases or multiple tenants.

What renter is utilized in the example design?

The example model utilizes an occupant named National Insulation, Inc. The rent schedule and lease details for this single occupant are used to demonstrate how to structure and compute rent capital.

Is a downloadable file supplied with the tutorial?

Yes. A downloadable file is consisted of with both a 'Template' and 'Completed' variation of the model. It is offered on a "Pay What You're Able" basis. Contributors receive update e-mails when new variations are launched.

How is AI used in modeling rent cash circulations?

A video shows how ChatGPT is used to design the same lease capital as carried out in Excel. This showcases how AI can help in structure custom-made modeling logic utilizing natural language triggers.

Where can I discover more about lease modeling thorough?

Accelerator members can check out comprehensive lease modeling in the 'Modeling Short-Term and Long-Term Leases' course. Advanced members can dive much deeper via Course 4, Lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' endorsement.

Version Notes

v1.01

- Misc. repairs and updates to Versions tab

v1.0

- Initial release

About the Author: Spencer Burton is Co-Founder and CEO of CRE Agents, an AI-powered platform training digital coworkers for commercial property. He has 20+ years of CRE experience and has financed over $30 billion in property throughout leading institutional companies.