Commercial Property Valuations made easy with automated Cash Flow, Exit Values, NPV, IRR and MIRR
Originally published: 07/02/2022 15:21
Publication number: ELQ-70218-1
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Commercial Property Valuations made easy with automated Cash Flow, Exit Values, NPV, IRR and MIRR

Commercial Real Estate Valuations the way Analysts and Investors need to see them with NPV, IRR, MIRR, Cash Flows and Exit Values

Description
This CRE Valuation Model will take you less than 40 seconds to input the data and view your results. The model only requires 9 x input fields relating to the lease amount, expenditures and incremental lease % and it will automatically provide you with a 5, 7, 10. 12, 15 and 20 year Model with all cash flows, exit values, NPV, IRR and MIRR, exactly what investors, fund managers, portfolio managers need to see. All or any factors may be changed in a flash. There are gearing options built-in to the model so that you can easily view the effects that gearing will have on the performance of the building. Most prudent investors will target a specific MIRR under certain conditions, so this formula is becoming the most important for analysts. A short note on the difference between IRR and MIRR. IRR has a flaw in that when the cash flows become positive, it will keep calculating these at the same rate as the initial cash flow. Now we know that it is virtually impossible to re-invest cash at the same rate as IRR, so MIRR corrects this by capping the positive cash flows to equal that of the funders rate because it is possible to invest in your own debt. This is why analysts will rely on MIRR more readily. The CRE Valuation model is dynamic and designed in a manner that admin or support staff are easily able to input the data on behalf of consultants.

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Further information

The main objective of this Valuation model is to be able to input basic data and see how the value measures against certain critical formulas such as NPV, IRR and MIRR. You are able to within a second change the cap rate and see how this effects the returns across 5 to 20 years. Change any data and perform CRE Valuations as the professionals will have.

Where you have buildings that are tenanted you will have the exact science. Untenanted buildings are valued exactly the same in that a predicted rental/lease amount is used to apply a value.

This is not a valuation mechanism for developments. We have specific development valuation models which must include XNPV and CIRR which re the date-sensitive version of NPV and IRR respectively


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