Commercial Office Acquisition

The assignment concerned the acquisition of a large office property. The acquisition analysis needed to connect the existing lease profile, renovation plan and financing terms to the investment returns rather than rely on a headline cap rate and a static year-one NOI.

The sponsor required a model suitable for reviewing the acquisition case, testing downside assumptions and explaining the proposed economics to capital partners. The property and client remain anonymised.

The operating schedule captured lease income, expiry and renewal timing, vacancy, rent changes and property costs. Renovation expenditure was placed on a timeline so its funding requirement and effect on occupancy could be assessed. The model rolled these items into NOI, cash flow and valuation across the intended hold period.

Debt schedules reflected acquisition funding, interest and amortisation. Coverage metrics - including DSCR - were calculated from the same operating case, while refinancing or exit assumptions could be changed without overwriting the base case. Investor contributions and distributions then flowed through a waterfall schedule.

The sensitivity framework focused on leasing pace, renovation cost, debt terms, hold period and exit cap rate. Checks reconciled the purchase sources and uses, debt balance and partner distributions.

The workbook gave the sponsor an independent and traceable analysis of the acquisition. Reviewers could see whether the projected return was being driven by operating improvement, leverage or exit assumptions and could test each element directly.

It supported the acquisition review and capital-partner discussion by connecting lease-level assumptions to coverage and returns. No claim is made about a closing, financing terms, realised performance or the identity of the building.

The traceable structure was particularly useful when comparing revised lender terms or an updated renovation programme. Rather than rebuilding the analysis from summary outputs, the team could preserve the operating case, update the relevant financing or capital inputs and review the resulting coverage and investor cash flows.