Blend And Extend NPV Calculator

NPV drives blend-and-extend decisions. This calculator compares scenarios.

Contract rent monthly

Blended rent monthly

Remaining months

Extension months

Landlord discount

Tenant discount

Landlord NPV

$2,661,988

Tenant NPV

-$3,016,637

Combined value created

-$354,649

How the math works

Compute PV of each stream at each party's discount rate; difference is that party's NPV of the restructure.

The deal becomes obvious when both NPVs are positive and combined value exceeds ~5-10% of total contract rent dollars. Below that, the friction of restructuring (legal, internal approvals, board) often eats the benefit on both sides.

How to Use

Enter contract rent monthly.
Enter blended rent monthly.
Enter remaining months.
Enter extension months.
Enter landlord discount %.
Enter tenant discount %.
Read NPV for both sides.

Frequently Asked Questions

Why NPV not straight dollars?

Different parties value cash flow differently. Landlord discount rate often 7-9% (required return on leased asset). Tenant often 5-8% (WACC). Same dollars carry different NPV weight, which is why deals that look symmetric in dollars pencil for both parties in NPV.

Key driver?

Time value of near-term rent relief vs extended-term commitment. Tenant gains from near-term dollars; landlord gains from term certainty. When both NPVs turn positive, deal executes.

When it fails?

Discount rates too similar (no NPV asymmetry to exploit). Market not stressed enough. Landlord already has strong demand for space. Tenant has no near-term cash pressure. Each removes motivation for restructure.