How Underwrite handles Office.
Office income is based on rentable area and annual rent per square foot. Review vacancy, lease terms and exit assumptions. The remote-work stress scenario tests a decline in demand.
The Office example opens with Underwrite Core. The worked example, Cayuga Commons, is free with no sign-in.
What the model covers
The operating summary shows these measures for a Office deal:
- Rentable SF. Total leasable office square footage.
- Rent / SF / Yr. Annual rent per SF. The engine treats this as a single figure; in practice office leases vary between full-service-gross and triple-net, with stops and escalations that change net effective rent materially.
- Vacancy. Stabilized vacancy. Office often carries 10-20% in non-trophy markets post-COVID.
- Cost / SF. Purchase price divided by SF. Wide range: $200/SF for Class B suburban, $1,000+/SF for trophy CBD.
- Y1 NOI / SF. NOI per SF; used to compare across deals at different scales.
Checks for this property type
The validation guards use these tighter bands for Office instead of the generic defaults:
- Property management % of EGI: 2-6%. Standard institutional band. Most office buildings have an on-site property manager and active leasing oversight.
Stress scenarios
The desk offers these stress scenarios when Office is the property type:
- Office WFH Shift. Vacancy +15pp, rent growth to 0, exit cap +125bps. Models continued remote-work migration and lower trailing demand for office space.
- All four generic stress scenarios (Base, Recession, Rate Spike, Aggressive) are also available on Office deals.
Example deal: Tower 18, Class B Office
The Office pre-built example computes to the headline values below. With Underwrite Core, open it in the tool to edit any input and watch the model update, or open its investment committee memo.
Current model boundaries for this asset class
These Office features are simplified or left out of the model, and stay with the analyst. The full list across all asset classes is at /methodology/beyond-phase-1.
- Without a tenant rent roll, office runs on aggregate SF × rent: TI / LCs, free rent, and rollover downtime enter the cash flow only per lease, once tenants are added.
- Full-Service Gross vs Net structure is collapsed; the engine treats rent as a single figure.
- Without a rent roll the engine assumes flat occupancy across the hold; with one, each lease expires on its own schedule and re-leases at market after its downtime.
- Renewal probabilities, expansion options and termination options are modeled per tenant when entered: each re-lease blends the renewal and market TI/LC, free rent and downtime by the probability, and both options are modeled as exercised. Without a rent roll, a re-tenanting reserve can apply TI, LC, downtime and free rent to a stated share of the space each year.