A Practitioner's Guide to Business Plans, Leases, Capital and the Decisions That Move Value
Julian R. Sterling
These are the five Excel workbooks that go with the book: the three appendices turned into
working documents, plus the two calculations the book returns to most often and never prints
in full — and a fifth that costs the one chapter with no figures in it at all. Every
number is a live formula. Nothing is locked, protected or watermarked.
Free to download. No sign-up, no email address, nothing to fill in.
Everything described below is inside it, with the read-me.
The five workbooks
Appendix A
Asset business plan
The plan as a working file: the narrative sections, a rent roll that computes the
occupational position — passing rent, ERV, reversion, occupancy by area and by rent,
WAULT, WAULB, the expiry and break profile, the concentration tests — a ten-year
projection to exit, and the base, downside and break-even page. Two rules are enforced
rather than suggested: contracted and speculative income never share a column, and the
purchase price appears nowhere. Every return is computed on today's net realisable
value.
Asset_Business_Plan.xlsx · XLSX · 29 KB
Appendix B · Chapter 6
Hold, refurbish or sell
The three options projected on identical assumptions from the same net realisable value,
with the forward return on each, then the interrogation questions and the sale preparation
checklist. The second sheet is the worked illustration of Chapter 6, live: the book
calls the forward return "comfortably positive but modest" and says that half a
point of exit yield "may drop it below the fund's cost of capital", without
printing either rate. They are 7.13% and 4.33%.
Hold_Refurbish_Sell.xlsx · XLSX · 22 KB
Chapter 8
Accept or hold out
The vacancy decision, quantified. Net effective rent for up to three packages; the
accept-or-wait arithmetic with every line of the holding cost; the two-offers example of
Chapter 8 as a live comparison; and the strategic vacancy record. It returns the two
numbers that end most arguments — the months of extra vacancy at which waiting breaks
even, and the rent you would have to achieve for waiting to have been worth
it.
Accept_or_Hold_Out.xlsx · XLSX · 18 KB
Appendix C
Monthly asset dashboard
The one-page dashboard, then arrears by occupier, the leasing pipeline with rejected
offers and their reasons, service charge against budget by line with the recovery
shortfall decomposed, capital with contingency reported separately, and a compliance
register that computes its own status against the reporting date.
Monthly_Asset_Dashboard.xlsx · XLSX · 23 KB
Appendix F · Chapter 13
The cost of doing nothing
Chapter 13 is called The Cost of Doing Nothing. It says the value of the chapter is
entirely in the comparison between doing the work in a void and doing it under a deadline —
and then does not make the comparison. There is not a figure in it. This file makes it, on the
chapter’s own building, with the deadline left in the abstract exactly as the book leaves it.
Doing nothing costs 4,770,000 in present value — one and a half times the
price of the work that avoids it. And the damage falls mostly on the exit, not on the rent:
4,035,000 of value forgone at sale against 3,131,000 of rent never earned. Which is the
chapter’s opening claim proved rather than asserted — building performance is a
valuation problem, and the arithmetic says so before the valuer does.
Planning the work into the year-three void is worth 1,302,000. The chapter calls
this the single largest cost saving available. It is the largest; it is not mostly a cost saving.
Only 613,000 of it is the cheaper contract. The other 689,000 is income — which means an
asset manager who defends early planning on the contractor’s price is understating their own
case by more than half, on the one ground a cost consultant is qualified to dispute.
And the cheaper technical route turns out to be the expensive one. The plant package saves
1,400,000 and loses by 501,000, because a buyer inheriting plant with two years of life left
deducts 1,590,000 to replace it. Durability is the book’s word for this; a deduction is the
buyer’s, and only one of the two appears in a price.
Sixteen checks, and a sensitivity sheet for the assumptions you will want to argue with. Two
conclusions survive all of them: do the work, and do it in the void.
Cost_of_Doing_Nothing.xlsx · XLSX · 20 KB
Conventions used throughout
Blue text
a hardcoded input — you may edit these
Black text
a formula — do not overtype these
Green text
a link to another sheet
Yellow fill
the assumptions that carry the answer
Why the arrears sheet has that extra column
It carries the average days late over the last four quarters, beside a flag for a changed
payment pattern. That column is the point of the whole format. The February finding in
Chapter 17 — an occupier at 8% of building income moving from paying on the due date
to paying eighteen days late for a third consecutive quarter — is visible there, and
invisible in any aggregate arrears figure.
Nothing else was wrong. The accounts on file were eight months old and sound. Early
information is worth a great deal, and it only arrives if something is looking for it.
Opening the files
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. 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.
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.
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.
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.
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