New IC memo section: reorders tornado entries by absolute IRR swing magnitude with priority tiers (critical / material / minor). Cherry Street's top 3 critical assumptions: Rent Growth (5.13 pp swing), LTV (3.77 pp), Exit Cap (3.75 pp). The IC team should verify those three assumptions first, then move to material (Vacancy, Interest Rate, OpEx Growth). Same underlying data as the tornado chart, presented as a ranked diligence priority list.
Changelog, page 19
What shipped, and when.
A day-by-day record of what landed in Underwrite, kept by hand. Page 19 of 23.
Want to verify? The six files the decision depends on are rendered from the live source at /methodology/engine.
Show only
Filter by engine, UI, AI, ops, marketing or fixes.
2026-05-14
5 entries
Phase 3 begins: live market data overlay (FRED Treasury / SOFR / CPI / inflation expectations) + 18 more institutional analytics. Live macro frame, deal-vs-market positioning, deterministic engine guarantee preserved (Cherry Street regression byte-identical with seeded fallbacks). 90 modules shipped today.
New IC memo section: forward cap = NOI / purchase price, year by year. The Y_hold forward cap vs the user-set exit cap surfaces the deal's implied cap shift directly. Cherry Street: Y7 forward cap ~8.6% vs exit input 6.5% = +210 bps cap compression priced in (aggressive). Pairs with the Cap Rate Spread analysis to give the IC a complete cap-rate-thesis view: are we underwriting cap compression, cap expansion, or cap-neutral?
New IC memo section: sweeps residential vacancy from current to +25 pp (retail scaled proportionally) and re-runs the full DCF at each level. Cherry Street loses ~300 bps of IRR per 500 bps vacancy spike; max feasible vacancy where DSCR still clears 1.25x is 11% (only 500 bps of operational headroom above current). The operational counterpart to the rate sensitivity curve: answers 'at what vacancy does this deal stop penciling for the lender?'
New IC memo section answers 'is leverage helping or hurting day 1?' Loan constant (P&I / loan) vs going-in cap rate (NOI / purchase). Positive spread = debt accretive from day 1; negative spread = leverage drags equity returns until rent growth or cap compression fixes it. Cherry Street prints loan constant 7.39% vs going-in cap 6.99% = -40 bps spread, turns positive in Y5 as NOI compounds. Critical day-1 leverage diagnostic that's standard institutional practice but rarely surfaced explicitly on memos.
New IC memo section: splits total MoIC into return-of-capital (1.0x baseline), operating component (interim distributions), and exit component (sale-driven profit). Cherry Street's 2.44x decomposes as 1.00x RoC + 0.44x operating + 1.00x exit (~70% of profit from exit). Same MoIC can come from very different shapes: 'exit-heavy' (>75% from sale) is a flip, 'balanced' (40-75%) is typical CRE, 'yield-heavy' (<40%) is income-driven. Complements the IRR decomposition with a dollar-multiple view.
2026-05-13
10 entries
Monte Carlo, Deal Strength composite score, sensitivity curves, break-even cushions, risk-adjusted returns, tenant concentration, hotel ops overlay, GP coinvest sweep, debt sizing optimizer, NOI decomp, a below-NOI leasing-capex parser, and 15 more analytics. The day the memo went from 'pro forma + waterfall' to 'institutional IC packet.'
New IC memo section (fires on rent-roll deals only): surfaces largest tenant's % of total Y1 rent, top 3 tenants' combined %, and the maximum single-year rollover concentration. Risk tier (low / moderate / high) maps to institutional norms (>50% on either single-tenant share or single-year rollover = high). Pine Tower's 4-tenant office example produces a useful moderate-tier read: Apex Capital carries the biggest rent share and the bunched lease start years concentrate rollover in years 4-8.
New IC memo section: Y1 OpEx % of EGI compared to the typical institutional band for the property type (Multifamily 40-50%, Mixed-Use 35-50%, Office 30-45%, Retail 25-40%, Hotel 60-78%, Industrial 12-25%). Flags in-band, above-band, or below-band with a plain-English interpretation. Below-band can mean efficient operations or under-budgeted; above-band means padding or operationally-heavy management. Quick sanity check that the validation logic doesn't catch on its own.
New IC memo section: Sharpe-like ratio = (project IRR - 5% risk-free) / Monte Carlo stdev, plus raw IRR/stdev and a downside ratio (IRR / |P10 - IRR|). Cherry Street prints Sharpe 3.86 ('Strong'), IRR/stdev 5.73, downside ratio 2.67, all institutional indicators of a deal with meaningful excess return per unit of variance. Standard portfolio analytics applied to the Monte Carlo distribution; complements the headline IRR with a risk-adjusted view that LPs running Sharpe-aware allocation use.
New IC memo section: measures the year-over-year volatility of operating CF (NOI - leasing capex) via coefficient of variation, mapped to a 0-100 stability score with qualitative band (Very Stable / Stable / Variable / Lumpy). Cherry Street scores 100/100 'Very Stable', smooth compounding of rent + expenses with no rent-roll lumpiness. Useful framing for LP fit: insurance / pension capital favors high stability, opportunistic LPs accept Lumpy in exchange for upside.
New IC memo section: entry / stabilized / exit caps + spread (exit - entry) with the framing classified in plain English (aggressive / neutral / conservative / very conservative). Cherry Street's -49 bps spread sits right at the neutral / aggressive cusp. Tells the IC at a glance whether the appreciation thesis lives on cap compression (aggressive), rent growth alone (neutral), or has a defensive cushion for rate hardening (conservative).
Capstone new IC memo section: a 0-100 composite score synthesizing all the new institutional analytics into a single headline number. Five subscores: Returns Quality (25), Risk (25), Capital Structure (20), Resilience (20), Operations (10). Each component has a transparent rationale shown in an expandable detail panel. Computed deterministically from the engine outputs: same inputs always produce the same score, locked in regression. Cherry Street scores 95/100 'Exceptional' (only loses 5 pts on Risk for a slightly thinner Monte Carlo P10).
New section: sweeps GP coinvest 0% / 5% / 10% / 15% / 20% / 25% and shows LP IRR + GP IRR + the gap at each. LP IRR is invariant across coinvest (LP capital and distributions scale together); GP IRR converges toward LP IRR as the GP commits more capital, diluting the promote's amplification effect. Useful when negotiating LP terms with the sponsor: quantifies the alignment of incentives at each coinvest level. Cherry Street pattern: 10% coinvest produces 13.91% LP / 24.83% GP / 11pp gap; 25% coinvest narrows to 13.91% / 19.06% / 5.15pp gap.
Engine validation now fires asset-class-native warnings: Hotel deals without the hotel-ops overlay get an info nudge to break out brand / mgmt / FF&E fees; Office deals without a tenant rent roll get an info nudge to add tenants; rent per SF / monthly rent per key / per unit get flagged outside institutional ranges (e.g. office $15-120/SF, multifamily $800-7,500/mo, industrial $4-24/SF). Closes one more facet of the 'one-shoe-fits-all' critique; the engine now actively coaches the analyst toward the asset-class-native modeling features rather than letting them silently underwrite a hotel with multifamily fields.
New IC memo section: proper three-section accounting view (Operating / Investing / Financing) that every IC committee, lender, and auditor expects to see. Sums to Net Cash to Equity, which matches the equity waterfall's headline series. Surfaces the exit year as a single combined number: operating CF + sale proceeds + balloon payoff = the biggest LP distribution on the memo. Adapts to deal structure (mezz lines and refi line only render when those features are active).
New IC memo section: debt yield (NOI / outstanding loan) year-by-year. Y1 / Y3 forward / exit-year debt yield + a refi-ability flag (clears the 8% institutional threshold = yes / no). Cherry Street prints 10.75% Y1 → 11.72% Y3 → 14.10% exit, well above the 8% bar, so a maturity refi is realistic instead of a forced sale. Pair with the leverage curve to read whether the deal has both refinance optionality AND room for incremental leverage.