A Practitioner’s Guide to What Actually Produced the Return, and Who Was Paid for It
Julian R. Sterling
These are the companion files of Commercial Real Estate Investing by Julian R. Sterling.The book on Amazon →
The four Excel workbooks that go with the book, corrected where they were wrong and completed where the book prints a
figure no workbook reproduced: the twenty-four attribution orders are now computed live, and the hold-period table, the
gearing ladder and the lease calendar in cash have their own sheets. Around them: the same models with the inputs emptied,
thirteen working documents to print, forty questions that mark themselves, and three cases the book names and never takes
to a number. Every workbook ends on a Checks sheet: 237 controls, every one green. Nothing is locked, protected or watermarked.
Free to download. No sign-up, no email address, nothing to fill in.
Twelve workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 23 September 2026.
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These carry the book’s own figures, so that every number it prints can be traced to a live
formula. Each closes on a checks sheet that ends ALL OK.
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Chapters 1 to 4
The income account, with the void applied
Ten units with their areas, passing rents, rental values and expiry years, and eleven years of
income built on top of them by formula. The re-letting rule is applied automatically: a lease
expiring at the end of year e pays its old rent through year e, three twelfths
of the new rent in year e+1, and the whole of it thereafter.
That single convention is what most models leave out, and it is visible here as soon as the
sheet opens: the rent line falls in five of the ten years, because each of
those is the year after an expiry. Passing rent starts at 1,575,900 against a
rental value of 2,284,000, two units of the ten are empty on day one, and year one produces a
negative net income of 265,863.
A sheet added in the revision reads the rent roll one division at a time and costs every
re-letting inside the hold in cash: 1,788,485 of rent never billed and 357,697 of fees,
2,146,182 in all, 10.3393 per cent of everything the estate collects.
An exit yield is a stabilised income over a gross value, so only one of the numbers people
quote as the entry yield can be set beside it. The sheet computes all six — 5.9693,
5.5892, 5.4551, 4.8681, 8.6515 and the like-for-like 7.0555 per cent —
and says why five of them compare two different things.
Against an exit at 6.65, the yield moved 0.4055 points. Not the 0.6807 you get
by subtracting the headline yield, and not the 2.0015 you get from the reversionary one. The
sale is priced on year eleven's 2,453,319 at 6.65 per cent, and the sheet also prices it on
year ten instead, which is worth 3,484,658 less — because year eleven is
the only year in four that carries no re-letting. (Corrected: the book capitalised year ten after
its one-off letting fee and printed 4,198,723.) A new sheet takes any exit yield and either base
year through the waterfall, and finds where the catch-up finishes: at 6.3285 per cent.
Switch the four drivers on one at a time and record the step in the equity return at each
switch. Do it in a different order and you get a different answer: leverage is worth
plus 1.8441 points when it goes on last and minus 1.1977 when
it goes on first, a swing of 3.0419 points on the same deal.
All twenty-four orders are here as live rows, computed from sixteen complete runs of the model
on the sheet itself (the first version typed them in), with each driver's minimum, maximum and average.
Only the average is order-independent: business plan 2.5923, rental growth
1.4816, exit yield 0.6711, leverage 0.4535 — and the four of them sum to exactly the
5.1986 points there are to explain, which the sheet checks. That is the only
attribution worth putting in a report.
Chapter 12’s thirteen hold dates have their own sheet: 4.0160 per cent at seven
years against 7.5473 at six, because Ardgour expires at the end of year seven and the sale is
priced on year eight.
The preferred return accruing year by year on unreturned capital and on unpaid accrued
preferred, capital returned, the full catch-up, then the eighty-twenty. The investor put in
14,943,867 and took out 29,341,958, of which 14,398,091 is
the preferred return itself: nothing above the hurdle, and a return of exactly
8.0000 per cent against a gross equity return of 8.6647. The manager took 2,114,640 of fees and
1,748,716 of promote.
The sheet also carries a switch that turns off the crediting of capital called after
completion. Turn it off and the promote goes from 1,748,716 to 3,451,151 on
exactly the same building and the same distributions — the whole difference being nine
years of preferred return on 1,108,947 the investor put in and did not get back.
Added: chapter 11’s seven gearings, each with its own capital account under both conventions,
and the hard hurdle. The promote peaks at 2,993,873 at 65 per cent and falls at 70 while
the equity return keeps rising; with no catch-up it would be 349,743.
The four workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Chapters 1 to 15
Your rent roll, your debt, your waterfall
The same four workbooks with the Inputs and Rent roll sheets emptied: sixty cells, from the price and the void to each unit’s area, rents and expiry. Nothing computes until all are filled; the sensitivity axes, the order selectors and the waterfall switch keep their values.
The book’s inputs are listed in a text file inside the archive. Type them back in and Bracken Wharf comes back with them: 8.6647 per cent, exactly 8.0000 to the investor, 1,748,716 of promote, and the four attribution averages.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 1 to 18
Thirteen working documents
The six entry yields and the one that compares. The rent roll, read one division at a time. The cheque at completion and year one in full. The re-letting calendar in cash, with a column for the holding costs the model leaves out. The exit assumption, interrogated. The four returns and what stands between each and your account.
The attribution grid for all twenty-four orders. The capital structure priced for its promote. The hold against the lease calendar and the fund’s wind-up window. The capital account year by year. The fee schedule’s four terms. The report a manager should publish. The seven questions for a paper that lands on Tuesday.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Seven on yields and the rent roll, seven on year one, the income account and the sale, six on the four returns and the yield, seven on attribution, gearing and the hold, seven on the waterfall, the promote and the fees, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapter 5 · Case one
The buyer's surveyor
Chapter 5 says a surveyor would capitalise year eleven and deduct Corrour’s void and fee, and stops. The deduction is 109,383, and every pound of it comes out of the promote while the investor stays at exactly 8.0000 per cent. The promote survives a deduction of up to 1,770,852, 16.2 times Corrour’s; priced on an ordinary year instead of the clean one, it is nil and the equity earns 7.2626 per cent. Nothing is added to the book’s figures.
Chapter 4 · Case two
What the void costs to hold
The chapter names empty rates, service charge, insurance and security, and prices none of them. At 30 per cent of the new rent a year of void (ADDED), 536,546 of holding costs remove 774,283 of promote, 1.44 times the cash, because the preferred return compounds on every pound withheld. 69.0 per cent of the cost lands in the years the rent already falls. Above 67.8 per cent the manager earns no promote at all.
Chapter 12 · Case three
The wind-up window
A fund that must sell at seven years (ADDED) takes the 4.0160 per cent notch. Renewing Ardgour a year early at the full indexed rent, with no void (ADDED), lifts the seven-year sale to 8.6397 per cent and pays the manager a promote of 991,913. The fund can concede up to 19.6 per cent of the rent and still match selling at six.
an input cell; everything else on the sheet is a formula
Black text
a formula — do not overtype these
Checks sheet
the printed figure beside the computed one, with a PASS or a FAIL; the sheet ends ALL OK
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
Why the checks matter more than the models
A workbook that agrees with a book proves nothing on its own — the author wrote both. What
the Checks sheets do is different: they force the model to reproduce, from a formula, a number
that was printed before the model existed.
On this book the discipline worked in the other direction twice, and the chapters carry the result
rather than the original claim. The first draft declared a nine-month void between leases and never
applied it; applying it turned the rent line from a rising staircase into something that falls in
five years out of ten, and made the hold-period table jagged rather than smooth. The second draft
computed the preferred return on the money subscribed at closing and ignored the
1,108,947 called a year later; correcting that cut the promote from 3,451,151 to
1,748,716 and moved the investor's return from 8.2150 per cent to exactly 8.0000.
Both errors flattered the story the book was telling. Both were caught by refusing to print a
number that would not reproduce.
A third pass, on the finished book, found a quieter one. Two chapters priced a sale on a year’s
income after its one-off letting fee, while the model, and the book’s own formula reference,
capitalise the income before it. Corrected, pricing the sale on year ten costs 3,484,658 rather than
4,198,723, and holding six years rather than seven costs 4,714,128 of proceeds rather than 6,025,963.
The conclusions stand; the figures under them are now the model’s.
Where two correct computations disagree, both are shown. The four attribution averages printed to
four decimals sum to 5.1985 against the model's 5.1986. The exit value is 36,892,015 computed from
the printed income and 36,892,021 from the unrounded. Neither gap is smoothed away.
Go beyond the companion files
Commercial Real Estate Investing develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF
prints on A4 or US Letter. They use no macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks
to update links on opening, decline — there are none.
What changed, and when
23 Sep 2026
The four workbooks corrected and completed. The sale priced on year ten costs 3,484,658 of net proceeds, not 4,198,723: the book capitalised year ten after its one-off letting fee (chapters 5, 16, 17 and 18). Holding six years rather than seven costs 4,714,128, not 6,025,963 (chapter 12). Chapter 2’s years five and nine rise because Dunardry and Eilanreach are the smallest leases, not the smallest reversions. The attribution orders, typed in the first version, are now computed from sixteen live runs; new sheets for the lease calendar, other exits, the hold and the gearing ladder. 237 checks in all. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
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