Investment Analyst and Commercial Complete offer the capability to perform a stabilized analysis
and a lease analysis simultaneously. It can be as simple as estimating
gross income ($20 per s.f. per year times 100,000 s.f.), estimating a frictional
vacancy rate, and estimating an expense ratio. One can then evaluate the
income stream instantly, under different conditions. For example, one can
change the mortgage terms, alter the growth rate assumptions, or change
the required rate of return. As these conditions are changed, Investment
Analyst provides instant feedback on the cash on cash yield, the debt coverage
ratio, the overall cap rate, the terminal value, and many other key indicators
that are critical to a thorough understanding of the property.
Whether you are an appraiser, a banker, an investor, or a broker, using
the macro view one can quickly determine whether the property meets your
criteria. If it does, Investment Analyst provides the capability of "drilling
down" to the lease detail by allowing you to enter detailed contract
lease terms for all tenants or only selected tenants, as necessary. For
example, most tenant spaces may be at "market" under relatively
short term leases, but one anchor tenant may be under a long term lease
that is above or below market. Detailed lease information can be entered
for just this tenant and the effect upon value can be evaluated.
Our approach differs from most "DCF software" that is available.
Other software typically takes the "bottom up" micro approach.
Lease terms must be entered for each space and critical assumptions that
affect the calculation of value are often hidden in the detail. This is
also true for expenses. Once all detail is entered, the "magic"
number is calculated by discounting the detail - a number that may, or
may not, represent Market Value. This approach to data entry is, perhaps,
good for property managers, but it is prone to user error or intentional
manipulation. Furthermore, errors that have crept into the data entry are
difficult to uncover, especially by a third party. The micro approach is
best applied when one is analyzing the historical or actual cash flows
that have already occurred, in order to calculate the actual yield of those
cash flows. But the "bottom up" approach is not suited for estimating
the value of a prospective income stream because of the inherent assumptions
that must be made about the future.
In summary, Investment Analyst and Commercial Complete offer both the flexibility
to quickly evaluate income producing property and the sophistication to
evaluate complex lease terms of individual tenants, when necessary. Analyst
is easy to use and its learning curve is short. Investment Analyst provides
analysis tools that are not available in other income analysis products.
Key indicators are at your fingertips. Assumptions are easily changed and
the changes are instantly reflected in the value calculation. Both a stabilized
analysis and a lease analysis can be performed simultaneously. Investment
Analyst has a built-in Review tool that reviews the reasonableness of your
inputs. The reports produced by Investment Analyst are presentation quality,
they are easy to understand, and they are easy to explain