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

I also include an optional file that you can download and use to follow in addition to the video. That file includes both a 'Template' and 'Completed' tab. You're likewise welcome to take the finished variation, and incorporate it straight into your own model.

Are you an Accelerator member? See the 'Modeling Short-Term and Long-Term Leases course in the curriculum. Additionally, if you're an Accelerator Advanced Member examine out course 4, lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' recommendation for extra methods for modeling leases. Not yet an Accelerator member? Consider joining the realty financial modeling training program used by top genuine estate business and elite universities to train the next generation of CRE professionals.

A lease schedule is a table that lists out the base lease 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 lease schedule is consisted of in the lease to describe the base rent paid by the occupant. So using the rent schedule above, we know that the tenant pays $382,500 rent in 2022 ($ 31,875/ month). The rent schedule hence becomes an important input for modeling the potential rent of a residential or commercial property.

A lease schedule module belongs of a genuine estate design that anticipates the potential rental earnings over the hold duration. So using the example above, the rent schedule module would take the lease schedule and determine precisely the lease for every period. And ideally the module would do this in a vibrant way.

The module will include a lease roll listing the significant inputs for each renter. So for instance, the rent roll would include renter name, suite, leased area, lease start date, lease end date, current lease, etc. Each tenant would then have a lease schedule that lays out how the base lease in time.

The module then takes the lease roll, the rent schedule, and models the real cash flow for each duration.

Quick Note: Not interested in DIY analysis? Consider working with A.CRE Consulting to handle your bespoke modeling project.

Watch Me Build Video - Partitioning the IRR in Real Estate

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

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

The outcome is a quick and easy method to dynamically model a rent schedule.

Download the Rent Schedule Module Exercise File and Module

To make this tool available to everybody, it is offered on a "Pay What You're Able" basis without any minimum (enter $0 if you 'd like) or optimum (your assistance helps keep the material coming - common real estate Excel modules offer for $100+ per license). Just enter a price together with an e-mail address to send out 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 offer our models on this basis, please reach out to either Mike or Spencer.

We routinely update the model (see variation notes). Paid contributors to the model get a new download link by means of e-mail each time the model is upgraded.

Bonus: Watch Me Model Rent Schedule Cash Flows Using AI

In this fast bonus offer video, I utilize ChatGPT to design the monthly capital for this same lease.

Frequently Asked Questions about Modeling a Lease Schedule in Excel and with AI

What is a lease schedule?

A lease schedule is a table that notes the base lease by date across the lease term. For example, it may reveal annual rent increases for an occupant on a long-term lease, such as $337,500 in 2018, $348,750 in 2019, and so on. It ends up being an essential input for modeling rental earnings.

What is a rent schedule module?

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

How is rent designed throughout time in this module?

Rent is modeled using a 132-month analysis period. Boolean logic guarantees lease is just shown when the lease is active. An INDEX/MATCH formula is then utilized to pull the right rent from the rent schedule based on the period.

What Excel techniques are used in the lease schedule module?

The model primarily uses the INDEX/MATCH mix to pull rent worths and boolean logic to restrict lease flows to the lease period. These formulas ensure the module stays vibrant and scalable for longer leases or numerous tenants.

What occupant is utilized in the example design?

The example model utilizes an occupant named National Insulation, Inc. The lease schedule and lease information for this single occupant are utilized to show how to structure and determine rent capital.

Is a downloadable file offered with the tutorial?

Yes. A downloadable file is included with both a 'Template' and 'Completed' variation of the design. It is provided on a "Pay What You're Able" basis. Contributors receive update emails when new versions are launched.

How is AI utilized in modeling lease money circulations?

A bonus offer video shows how ChatGPT is utilized to design the exact same lease capital as carried out in Excel. This showcases how AI can assist in building custom-made modeling reasoning using natural language triggers.

Where can I find out more about lease modeling extensive?

Accelerator members can explore detailed lease modeling in the 'Modeling Short-Term and Long-Term Leases' course. Advanced members can dive deeper by means of Course 4, Lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' endorsement.

Version Notes

v1.01

- Misc. fixes 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 industrial genuine estate. He has 20+ years of CRE experience and has actually financed over $30 billion in real estate across top institutional companies.