Weighted Metrics in CRE Syndication

[Naqi Taylor]

For those actively syndicating or allocating into stabilized commercial assets — how much weight do you put on NOI durability versus headline upside?

I'm seeing more situations where predictability and DSCR matter more than aggressive appreciation assumptions, especially in tighter credit environments.

Interested in how others are underwriting these today.

[Chris Seveney]

Quote from @Naqi Taylor:

For those actively syndicating or allocating into stabilized commercial assets — how much weight do you put on NOI durability versus headline upside?

I'm seeing more situations where predictability and DSCR matter more than aggressive appreciation assumptions, especially in tighter credit environments.

Interested in how others are underwriting these today.

 I have always ignored aggressive appreciation assumptions. Those that if they birfurcated the returns and the entire upside was based on appreciation typically end up in very bad situations.

We underwrite these deals for conservative stabilization time period and absorption, conservative rent growth and long term hold with again conservative appreciation. Its not about getting 30% IRR its about capital preservation and long term growth.