In this Watch Me Build video I reveal you how to develop a custom-made lease schedule module for long-lasting leases. The foundation of the module is a simple INDEX/MATCH combination that takes a rent schedule and models the rent money streams across the whole hold duration.

I also consist of an optional file that you can download and utilize to follow along with the video. That file includes both a 'Template' and 'Completed' tab. You're likewise welcome to take the finished variation, and integrate it straight into your own design.

Are you an Accelerator member? See the 'Modeling Short-Term and Long-Term Leases course in the core curriculum. Additionally, if you're an Accelerator Advanced Member have a look at course 4, lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' endorsement for extra techniques for modeling leases. Not yet an Accelerator member? Consider signing up with the property monetary modeling training program used by top property business and elite universities to train the next generation of CRE specialists.

A rent schedule is a table that notes 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 outline the base lease paid by the occupant. So using the rent schedule above, we know that the renter pays $382,500 rent in 2022 ($ 31,875/ month). The lease schedule hence becomes an essential input for modeling the prospective lease of a residential or commercial property.

A rent schedule module is a part of a real estate design that anticipates the possible rental earnings over the hold duration. So utilizing the example above, the rent schedule module would take the lease schedule and compute exactly the rent for every single duration. And ideally the module would do this in a dynamic way.

The module will include a rent roll listing the salient inputs for each renter. So for example, the lease roll would include renter name, suite, leased location, lease start date, lease end date, present lease, and so on. Each renter would then have a lease schedule that outlines how the base rent changes over time.

The module then takes the lease roll, the rent schedule, and designs the real money circulation for each period.

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

Watch Me Build Video - Partitioning the IRR in Real Estate

So in this Watch Me Build video, I reveal you how to build a lease schedule module for a long-term lease. I first drop in an export of a lease roll. From there, I add a rent roll for a single renter (National Insulation, Inc.) and connect the relative details from the rent schedule to the lease roll.

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

The result is a quick and simple way to dynamically model a lease schedule.

Download the Rent Schedule Module Exercise File and Module

To make this tool accessible to everyone, it is offered on a "Pay What You're Able" basis without any minimum (go into $0 if you 'd like) or optimum (your assistance assists keep the content coming - typical realty Excel modules sell for $100+ per license). Just go into a cost together with an email address to send the download link to, and after that click 'Continue'. If you have any concerns about our "Pay What You're Able" program or why we provide our designs on this basis, please connect to either Mike or Spencer.

We routinely upgrade the model (see variation notes). Paid factors to the model get a new download link through e-mail each time the model is updated.

Bonus: Watch Me Model Rent Schedule Cash Flows Using AI

In this fast perk video, I use ChatGPT to design the month-to-month money flow 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 notes the base lease by date across the lease term. For example, it may show annual lease boosts for a tenant on a long-term lease, such as $337,500 in 2018, $348,750 in 2019, etc. It ends up being a crucial input for modeling rental earnings.

What is a rent schedule module?

A rent schedule module belongs of a realty model that anticipates rental income over the hold period. It uses renter lease data from the rent roll and a lease schedule to design rent cash streams dynamically for each analysis duration.

How is rent modeled throughout time in this module?

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

What Excel strategies are utilized in the rent schedule module?

The model primarily uses the INDEX/MATCH combination to pull lease values and boolean logic to restrict lease flows to the lease duration. These formulas make sure the module stays vibrant and scalable for longer leases or multiple renters.

What tenant is utilized in the example design?

The example design utilizes a renter called National Insulation, Inc. The lease schedule and lease information for this single renter are utilized to show how to structure and compute rent money flows.

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 get upgrade emails when new versions are released.

How is AI utilized in modeling rent capital?

A reward video shows how ChatGPT is used to design the exact same rent capital as performed in Excel. This showcases how AI can assist in building custom-made modeling reasoning utilizing natural language prompts.

Where can I find out more about lease modeling extensive?

Accelerator members can check out comprehensive lease modeling in the 'Modeling Short-Term and Long-Term Leases' course. Advanced members can 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 business genuine estate. He has 20+ years of CRE experience and has actually financed over $30 billion in real estate across leading institutional companies.