A Practitioner’s Guide to Pricing an Appraisal, LP Portfolios and Real Estate Continuation Vehicles
Julian R. Sterling
These are the companion files of The Real Estate Secondaries Investor by Julian R. Sterling.The book on Amazon →
The five Excel workbooks that go with the book, corrected where they were wrong: four models that
reproduce every figure it prints, each closing on a checks sheet, and the seventy-two questions of Appendix A as a
working document. Around them: the four models with the inputs emptied, thirteen working documents to print, including
the transfer and consent tracker the book promises, forty questions that mark themselves, and three cases the book
names and never takes to a number. Every number is a live formula. Nothing is locked, protected or watermarked, and no
email address is asked for.
Thirteen 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. The four models now close on a checks sheet: 156 checks, all passing.
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Chapters 5 to 9 · start here
The discount you are actually paying
The whole argument of the book in one file. An interest reported at
€38.5 million, offered at 82 per cent of that number, and the four
discounts that follow.
The headline is 18.00 per cent. Remove the smoothing from the
appraisal series and it is 14.42. Add the unfunded commitment, which is funded at par and
bought at no discount, and it is 13.01. Deduct the management fees the interest still owes
to the end of the fund’s life and it is 9.18. The headline is roughly
twice the truth, and none of the three deductions is a market view.
Sheet 4 carries the threshold that matters most, now solved by the sheet: below α = 0.1317
— below an appraiser absorbing about 13 per cent of new information each
quarter — an 18 per cent discount to the appraisal buys no discount to value at
all (the book prints 0.1315, found by a search in steps).
New: sheet 5 prices the offer across α and the lag, sheet 6 is the bridge from value to price.
The offer is a 14.21 per cent margin on the adjusted value of €36.80 million; the book’s
margin table was computed at 12.5 and 17.5 per cent on its 12 and 18 per cent lines, which are
€32.38 and €30.18 million, not 32.20 and 30.36. 62 checks.
The same value reached from the other direction, without using the reported net asset value
at all. Six assets, an estimated rental value, a non-recoverable ratio, an exit yield and a
capital expenditure line each.
Gross asset value rebuilds to €291.83 million and the interest to
€36.57 million — against €36.89 million from
unsmoothing the reported series. The two methods share no inputs and land
0.87 per cent apart.
Sheet 3 marks the in-place debt, worth €1.478 million to this interest and
invisible in the accounts. Sheet 4 is the one to read before bidding:
twenty-five basis points on the exit yields moves the value of the interest by
7.79 per cent — more than the entire unsmoothing argument is worth.
New: sheet 5 carries the six scenarios of Chapter 19, the refinancing headroom
(26.9 per cent) and the two thresholds, solved in the sheet: exit yields can rise
45 basis points, or rental values fall 7.3 per cent, before the offered
price equals the rebuilt value (the book prints 46 and 7.4). 35 checks.
A continuation vehicle offers 90 per cent of net asset value, or a rolled interest
for 4.0 years on new terms. Rolling only wins if the assets return
1.667× — a 13.62 per cent annual return.
Sheet 2 converts the vehicle’s fee and carried interest into the language the
decision is made in: they cost a rolling investor 1.62 points of annual
return — and more, not less, if your opportunity cost is higher.
Sheet 3 is the open-ended fund version. If the appraisal stands above spot value, the
redemption queue pays you at a number that still has to fall. A one-year queue justifies selling
today at up to a 14.45 per cent discount; a three-year queue,
31.80.
Revised: the break-even multiples were typed in and are now computed by the sheet, in closed
form, so they move with the terms. Every figure the book prints was right. 38 checks.
Five interests, one price. Price each line at a margin on its own adjusted value and the
portfolio discount is 22.22 per cent. The simple average of the five
line discounts is 23.92. Only the first is true, and the second is the one that ends up in
memos.
Sheet 2 prices the seller’s all-or-nothing requirement. Excluding the weakest line
takes the discount on the remaining four from 22.22 to 19.63 per cent
— so insisting on a single lot costs the seller 2.60 points. That is the
number to negotiate with. Sheet 2 now finds the weakest line itself. 21 checks.
The seventy-two questions of the appendix, in the same order and the same words, read from
the same source file as the chapter so the book and the workbook cannot drift apart.
Columns for the answer, the source document, the owner and the date. The status column marks
any question answered without a source as unsourced, and the progress sheet
counts only the sourced ones. An answer whose only authority is the seller is not an answer.
The four models with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Chapters 5 to 17 · Appendix B
Your series, your tape, your vehicle, your portfolio
The four discounts and the unsmoothing, the rebuild from the tape with the debt and the stress case, sell or roll with the redemption queue, and the portfolio bid, with the same formulas and every blue cell emptied. The alphas, lags, margins, shocks, rates and queue lengths are steps and stay. The seventy-two questions already arrive empty, so they have no blank twin.
The book’s inputs are listed in a text file inside the archive. Type them back in and the book’s figures come back with them: 18.00, 14.42, 13.01 and 9.18 per cent, €36.57 million from the tape, a break-even of 1.667×.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 1 to 21
Thirteen working documents
Why the interest is for sale, with the five reasons and their tells. The net asset value layer by layer, and the four documents to ask for in order. Reading a valuation report, with the realisation history. The four discounts and their thresholds. Unsmoothing and the lag. The tape and the second road, with the diagnostic when the two disagree. The debt: the mark, the refinancing headroom and three clauses.
The one-page bid and the four mechanics between reference date and completion. The transfer and consent tracker, the fifth workbook the book announces and never shipped, in the order consents actually run. Sell or roll with the five questions, and the redemption queue. The portfolio bid and the tail rule. The stress case and the decision record. The first mark, and what would actually falsify the trade.
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 sellers, shapes and the net asset value, seven on the four discounts, seven on the tape and the debt, six on the bid, the transfer and after, seven on vehicles, queues and portfolios, 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.
Chapters 8 and 20 · Case one
The unfunded commitment, refined
The three refinements of Chapter 8, switched on. On the book’s interest they give back 0.66 points; on an interest early in its life (ADDED: 15 unfunded on 12 of NAV) the same 18 per cent headline is worth only 6.26 per cent. New money stops diluting only if it is bought 16.85 per cent below value, and a seller’s drawdown forecast is worth €0.26 million on Kestrel.
Chapter 14 · Case two
Deferred consideration, and the staple
The chapter says the gap between a seller’s higher rate and the buyer’s is the value deferral creates. It is the other way round: keeping a 15 per cent seller whole on half the price deferred a year costs a 12 per cent buyer €0.423 million (ADDED rates); deferral pays only when the buyer’s rate is the higher. A €10 million staple into a fund returning 9 per cent (ADDED) costs €0.96 million, 18.4 per cent of the margin.
Chapters 13 and 20 · Case three
From the reference date to completion
The four mechanics, priced. On the book’s figures value movement over the two quarters is €0.27 million at the recovered return, against €1.80 million of distributions: it becomes the largest of the four only beyond a fall of 2.47 per cent a quarter. With interest on the price and a capital call (ADDED), the discount actually bought at completion is 12.08 per cent; a reference date one quarter earlier is worth €0.41 million to the seller.
Blue text on a pale blue fill is an input — edit these. A yellow fill is the carrying
assumption of the sheet, the one to argue about first. Black text is a formula. The last sheet of
each model is its checks sheet: every control states its own verdict, and the file ends ALL OK.
ADDED marks a figure the book does not give, used in the cases and flagged wherever it appears. Nothing is locked,
protected or watermarked, there are no macros and no external links, and every file opens in Excel,
LibreOffice or Numbers.
If a figure disagrees with the book
The checks sheet in each of the four models lists every printed figure beside a live formula
that recomputes it. Where the book was wrong, the check carries the right figure and says what the
book prints; the changes are listed below and at the end of 00_START_HERE.md. If you find another,
please say so, and it will be corrected.
What changed, and when
23 Sep 2026
The four models corrected and given checks sheets (156 checks). The α threshold is 0.1317, solved in the sheet, not 0.1315. The margin table of Chapter 13: 32.38 and 30.18 on the 12 and 18 per cent lines, not 32.20 and 30.36. The Chapter 19 thresholds are +45 basis points and -7.3 per cent, not +46 and −7.4. Added: a blank set, thirteen working documents including the transfer and consent tracker, 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 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.
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.
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.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 - the preferred return, and nothing above it.
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. The number that mattered appears in no report at all.
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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