Commercial Real Estate Analysis Engine

Commercial Real Estate Deal Analyzer

Underwrite commercial multifamily, retail strip centers, industrial warehouses, and office buildings in under 60 seconds. Calculate Net Operating Income (NOI), Cap Rate, DSCR, 10-year discounted cash flows (DCF), and levered IRR with 100% browser privacy.

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Institutional Commercial Underwriting Framework

Commercial real estate investments involve complex lease structures, tenant expense reimbursements, commercial debt covenants, and long-term capital expenditure cycles. DealAnalyzer normalizes these complexities into a structured, reliable mathematical model.

1. Net Operating Income (NOI)

Calculate Effective Gross Revenue minus direct Operating Expenses (Taxes, Insurance, Utilities, CAM, Management) before debt service.

2. Cap Rate Valuation

Establish asset value using the income approach: Property Value = Stabilized NOI ÷ Market Capitalization Rate.

3. Multi-Year DCF & IRR

Project 5-year to 10-year discounted cash flows, terminal disposition proceeds, and levered Internal Rate of Return (IRR).

Commercial Lease Structures: Gross vs. Modified Gross vs. Triple Net (NNN)

Commercial properties utilize distinct lease structures that dramatically influence landlord net operating income stability:

Full-Service Gross

Tenant pays flat rent; landlord pays all operating expenses, taxes, insurance, and utilities. Landlord absorbs all inflation risks.

Modified Gross

Tenant pays base rent and a proportionate share of operating expense increases above an initial base year benchmark.

Triple Net (NNN)

Tenant pays base rent plus 100% of property taxes, building insurance, and common area maintenance (CAM), shielding landlord cash flow.

Worked Commercial CRE Case Study: $3.2M Neighborhood Retail Center

Underwriting breakdown for a 14,000 sq ft unanchored suburban retail strip center with 4 national and regional credit tenants:

Purchase Price: $3,200,000 | 30% Equity Down ($960,000) | $2,240,000 Commercial Loan @ 6.75% (25-Yr Amortization)

• Scheduled Gross Base Rent: $310,000 / year ($22.14 / sq ft average)

• NNN CAM Reimbursements: $78,000 / year (Property Taxes, Building Insurance, Common Area Maintenance)

• Effective Gross Revenue (after 5% vacancy credit): $368,600 / year

• Operating Expenses: $84,000 / year (Net Operating Income: $284,600 / yr • 8.89% In-Place Cap Rate)

• Annual Commercial Debt Service: $185,450 / year ($15,454 / mo)

• Pre-Tax Net Cash Flow: +$99,150 / year (+$8,262 / mo spendable cash dividend)

• Lender DSCR: 1.53x | Year 1 Cash-on-Cash Return: 10.33% | 5-Year Levered IRR: 18.4%

Featured Underwriting Engines

vs. BiggerPockets Alternative → 100% free in-browser deal analyzer with no calculation caps and zero cloud tracking. Commercial Broker Suite → Commercial broker suite for rapid deal triage, DSCR debt sizing, and client mandate presentations. Real Estate Calculator for Agents → Prepare investor-ready return snapshots and 1-page PDF deal flyers in under 60 seconds. Cap Rate Calculator → Quick capitalization rate calculations and unlevered income verification.

Frequently Asked Questions About Commercial Analysis

How do you underwrite a commercial real estate property?

Commercial underwriting requires determining Net Operating Income (NOI), applying submarket cap rates, and stress-testing lender DSCR ratios.

What is the formula for Debt Service Coverage Ratio (DSCR)?

DSCR = Annual Net Operating Income (NOI) ÷ Total Annual Mortgage Debt Service. A ratio above 1.25x is typically required.

What is the difference between Triple Net (NNN) and Gross leases?

In a Gross lease, the landlord pays all expenses. In a NNN lease, the tenant reimburses property taxes, insurance, and CAM expenses.

What is an exit capitalization rate?

The exit cap rate is the projected market yield used to estimate the commercial asset's sales price at the end of the planned holding period.

Can I analyze retail, industrial, and office properties with this tool?

Yes. DealAnalyzer includes specialized presets for retail, industrial warehouses, suburban office, and multifamily apartment complexes.