Three paths, each one priced
Hold, sell and refinance compared over five years, then a recommendation.
- Length
- 10 business days
- Price, indicative
- From $3,000 per property
Per the Mortgage Bankers Association, seventeen percent ($875 billion) of the $5.0 trillion in outstanding commercial mortgages held by lenders and investors is scheduled to mature in 2026. A maturity forces a choice, and the easy default is whatever the current lender offers. The analysis prices all three paths before that conversation.
Ten business days, three paths
- Days 1 to 2
Property and loan
Leases, operating statements, loan documents, payoff figures and any offers or repair bids.
- Days 3 to 4
Value today
A current value range from income and comparable sales, the starting point for every path.
- Days 5 to 7
Three paths modeled
Five years of cash flow for holding, selling and refinancing, on current debt terms.
- Days 8 to 9
Risks tested
Each path rerun with higher rates, a vacancy and a higher cap rate at exit.
- Day 10
Memo and call
A memo recommending one path, with the numbers, risks and next steps, then a 30-minute call.
What lands on your desk
- Who it is for
- Owners facing a loan maturity, an offer or a big repair
- Format
- Remote review, five-year model, memo and call
- A current value range, with the income and cap rate behind it
- A five-year cash flow for each path: hold, sell and refinance
- Cash in hand and yearly cash flow for each path, before tax
- A sensitivity table for interest rate, vacancy and exit cap rate
- A memo recommending one path, with the risks and next steps
- A 30-minute call to walk through the model
Who it suits, and who not
Right for you if
- Owners with a loan maturing in the next six to eighteen months
- Owners holding an offer and unsure what keeping the building is worth
- Owners facing a large repair that changes the math
- Partners who disagree about whether to sell
Look elsewhere if
- Tax planning for a sale or exchange (talk to your CPA)
- Arranging a loan or listing the property (we are neither lender nor broker)
Example: an apartment building with a loan coming due
The owner of a 16-unit apartment building in Riverton has a $780,000 loan at 4.25% maturing in eight months and $112,000 of net operating income. Refinancing at 7.0% lifts debt service from about $51,000 to $66,000 a year. Selling at the $1,400,000 the income supports at an 8.0% cap rate leaves about $536,000 after 6% costs and the payoff, before tax. With $190,000 of roof and boiler work due within three years, the memo recommends selling, and lists questions for the owner’s CPA.
Hold, sell or refinance analysis questions, answered
Why a five-year view?
Because five years is long enough to show a path’s real cost and short enough to rest on known leases and debt terms. Longer views lean harder on guesses about rents and rates. If your loan or main lease runs longer, we extend the model and mark where the guessing starts.
Where do the debt terms come from?
From quotes or term sheets you already have, and otherwise from indicative terms offered by lenders active in your market. The model shows the rate, amortization, term and coverage test it assumes for each path. We are not a lender or a mortgage broker, and we do not arrange the loan.
Is this investment or tax advice?
No. It is a real estate analysis that ends in a recommendation for one property. The tax side of a sale, including capital gains, depreciation recapture or a 1031 exchange, is your CPA’s question, and the loan documents are your attorney’s. We are glad to send both of them the model.
Will you sell the property for me?
No. We do not list, market or sell property, and we earn nothing from whichever path you choose. That is the point: the recommendation has no commission behind it. If you decide to sell, hire a licensed broker; the analysis gives you a value range to test their pricing against.
What if several loans come due?
Each analysis covers one property, because each loan and each set of leases is its own decision. If several maturities fall close together, start with the portfolio health check, which lines up loans and lease roll across up to five properties, then analyze the ones that need a decision first.
Read on before you call
Scope this with us
A free 30-minute call to see whether the hold, sell or refinance analysis fits your property, your dates and your budget.