Mark to Market Rent Calculator

Rent rolls carry embedded gains when under-market. This calculator sizes total mark-to-market uplift.

In-place annual rent

Market annual rent

Avg remaining years

Discount rate %

PV of mark-to-market

$885,505

Annual gap $

$300,000

Gap %

20.00%

How the math works

PV = annual gap × PV annuity factor over remaining WALT at discount rate.

Positive mark-to-market adds to sale value; negative discounts it. Institutional buyers track portfolio MTM annually and rebalance when gaps concentrate.

How to Use

Enter total in-place rent.
Enter total market rent.
Enter average remaining term years.
Enter discount rate.
Read PV of mark-to-market.

Frequently Asked Questions

Why discount?

In-place is locked; market rolls only at expiration. MTM gap at year-5 tail is worth less today than gap at year-1. Discount at investor-required return or cap rate.

Portfolio application?

Aggregate across all leases, weighted by rent-roll size. A $12M portfolio with $1M in-place and $1.2M market is 20% under-market. PV over remaining WALT captures present value.

Cap rate offset?

Buyers pay premium for lease-up potential (under-market) and discount for lease-down risk (over-market). Mark-to-market justifies 2-5% of purchase price in tight markets.

What documentation matters here?

Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.