New IC memo section: year-by-year YOC = NOI / Total Uses (purchase + closing + fees + cumulative leasing capex). Cherry Street starts at 6.81% Y1 yield, stabilizes at 7.24% by Y3, and exits at 8.19% Y7, a 138 bps compression from Y1 to exit. The institutional 'income half' of returns; pair with the exit-vs-entry cap spread to read whether the appreciation thesis is conservative or aggressive.
Changelog, page 20
What shipped, and when.
A day-by-day record of what landed in Underwrite, kept by hand. Page 20 of 23.
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2026-05-13
15 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: for each key driver (exit cap, rent growth, vacancy), surfaces the value at which IRR crosses zero (the break-even) and the cushion in basis points between current and break-even. Flagged thick / moderate / thin / negative. Cherry Street has thick cushions everywhere: exit cap could go from 6.5% to 11.1% (462 bps), rent growth could drop from 3% to -1.7% (468 bps), and vacancy basically has unlimited cushion thanks to the appreciation gain crystallizing at exit. A deal with thin cushions on multiple drivers is fragile; thick cushions across the board mean real margin of safety.
New IC memo section: NPV of the equity cash flow series discounted at 5% / 8% / 10% / 12% / 15% / 18%, the institutional hurdle ladder. Each row flagged accretive (NPV > 0) or dilutive. Cherry Street is accretive at all rates 5% through 15% but dilutive at 18%, with NPV crossing zero between 15% and 18% (consistent with the 15.34% project IRR). Lets the LP map the deal to their specific fund hurdle instead of just reading a single IRR number.
New IC memo section answers 'when does the LP get made whole?' with three concrete year measures: operating payback (interim distributions only: captures whether yield alone returns capital), total payback (interim + exit-year sale proceeds), and discounted payback (cash flows discounted at the pref rate). Cherry Street's operating payback is never within hold (rent yield well below 15%); total and discounted both land on Year 7 (the exit). Year-by-year cumulative CF table shows the running net cash position, so the IC can read the trajectory at a glance.
New IC memo section: surfaces typical institutional ranges for project IRR, entry cap rate, senior LTV, and min DSCR per property type (Multifamily, Mixed-Use, Office, Retail, Hotel, Industrial), drawn from NCREIF / CBRE / JLL Q4 2025 transaction surveys. Each metric is flagged in-band, above-band, or below-band so the analyst can sanity-check at a glance whether the deal is in the market middle or an outlier. Cherry Street's IRR / cap / LTV all sit in-band; DSCR is conservatively above-band (1.46x vs typical 1.25-1.45x).
New IC memo section: sweeps the senior debt rate -100bps to +200bps in 50bps steps and re-runs the full DCF, capturing IRR + min DSCR at each rate. Cherry Street loses ~126 bps of IRR per 100bps of rate spike; max feasible rate (where min DSCR still clears 1.25x) is 7.75% (~150bps of headroom over current). Useful when sizing acquisitions against a rising-rate forward curve: see at a glance how rate-sensitive the deal is and where the lender feasibility ceiling sits.
New IC memo section: each year's Δ NOI broken into Δ EGI (revenue) and Δ OpEx, with residential and commercial revenue Δs called out separately. Surfaces whether NOI growth is coming from rent compounding, lease-up vacancy burnoff, free-rent rolloff, or expense discipline. A deal growing on rent compounding is materially different from one growing on burnoff; this section makes the distinction visible at a glance.
New IC memo section: 50 / 25 / 25 default probability split (base / upside / downside) using the existing Aggressive and Recession stress definitions for the wings. Cherry Street headline IRR 15.34% becomes 12.58% on a probability-weighted basis, a 276 bps drag that surfaces tail-risk an analyst would otherwise miss when staring at a single base-case number. The framing stays consistent with the stress matrix and ScenarioBar overlays: same shocks, just blended into a single expected value.
New IC memo section: shows the three lender tests (LTV cap 75%, DSCR floor 1.25x, debt yield floor 8%) side-by-side with the binding constraint flagged. Tells the IC at a glance which test gates leverage on the deal. Cherry Street is LTV-binding at $6.375M (75% × $8.5M); DSCR allows $6.432M and debt yield allows $7.426M, so policy LTV is the gate. Pattern: DSCR-binding deals need better operations or lower rates; LTV-binding deals are at the lender's policy ceiling.
Optional hotelOps block activates only on Hotel deals. When set, the engine deducts brand fees (royalty + marketing + central reservations), management fees, and FF&E reserves as three separate below-EGI lines, each sized as a percent of EGI per institutional convention. Cherry Street and non-hotel deals stay byte-identical. Closes one of the biggest 'one-shoe-fits-all' items on the Hotel section of /beyond-phase-1; lenders and brand counterparties expect these obligations surfaced rather than buried in generic OpEx.
Optional gpCoinvestPct on the waterfall splits the equity check between LP and GP, then produces standalone IRR / MoIC streams for each. Cherry Street + 10% GP coinvest produces LP IRR 13.91% / 2.24x MoIC and GP IRR 24.83% / 4.19x MoIC against the 15.34% project IRR, the textbook 'promote amplifies GP coinvest' pattern every IC committee expects to see when the sponsor co-invests alongside the LP. Adds a new Inputs panel field and Returns Summary block when coinvest > 0.
New section: side-by-side comparison of project IRR, MoIC, min DSCR, verdict, and Δ IRR vs base across every stress scenario applicable to the current property type. Reads at a glance: a deal that holds verdict PURSUE under recession AND rate spike is more institutionally durable than one that only clears the base case.
Standard IRR implicitly assumes interim distributions compound at the IRR itself, unrealistic for double-digit returns. MIRR uses an explicit reinvestment rate (default: the pref rate, an LP-conservative proxy) and a finance rate (also pref). For Cherry Street's 15.34% IRR with an 8% pref, MIRR lands at 14.40%, a 94-bps gap that surfaces the 'IRR overstates returns when distributions can't compound at the deal rate' effect every IC analyst is taught. New row in the Returns Summary table; canonical locked in regression.
New IC memo section: sweeps the hold period from 3 to 10 years and re-runs the full deterministic DCF at each point (matching debt term to hold so it's a clean comparison). Surfaces project IRR and MoIC at every hold year, flags the IRR-maximizing optimum, and shows the delta from current. Cherry Street's pattern: IRR peaks at a 3-year flip (17.4%) but MoIC compounds from 1.58x at year 3 to 3.20x at year 10. Lets the IC ask 'are we over- or under-holding?' against the deal's own math.
New IC memo section: re-runs the full deterministic DCF at LTV = 0% / 25% / 50% / 60% / 65% / 70% / 75% / 80% and surfaces project IRR, MoIC, min DSCR, lender feasibility (DSCR ≥ 1.25x), and a callout for the optimal feasible LTV with the leverage premium it produces. Cherry Street's current 65% LTV produces 15.3% IRR; the optimal 75% LTV would produce 17.6% (a 731 bps premium over the unlevered 10.3%), so Cherry Street is actually under-levered relative to its own math.