Pro Forma Sensitivity Calculator

Sensitivity test assumptions. This calculator flexes.

Base NOI

Base cap rate %

Rent flex % (+/-)

Expense flex % (+/-)

Cap rate flex bps (+/-)

Base value

$27,692,308

Upside value

$30,600,000

Downside value

$25,200,000

How the math works

Base value = NOI / cap. Upside: higher NOI, lower cap. Downside: lower NOI, higher cap.

$1.8M NOI / 6.5% = $27.7M base. Upside $31.5M (+14%). Downside $23.4M (-15%). 30% spread between upside/downside. Institutional LPs expect this context.

How to Use

Enter base NOI.
Enter base cap rate %.
Enter rent flex %.
Enter expense flex %.
Enter cap rate flex bps.
Read value range.

Frequently Asked Questions

Key variables?

Rent growth (+/- 1%). Vacancy (+/- 1%). Expense growth (+/- 1%). Cap rate (+/- 25 bps). Each 1% rent swing = 1.8-2.5% value swing. 25 bps cap rate = 5-7% value swing. Most sensitivity in cap rate and rent.

Base case + sensitivity?

Present base case, upside (rent +1%, cap -25bps), downside (rent -1%, expense +1%, cap +50bps). Clarifies investor expectations. Institutional LP: mandatory in pitch books. Stress downside to test margin of safety.

Margin of safety?

Target: base case 10%+ above 'break-even' exit. Adverse scenarios shouldn't impair equity. If downside yields negative equity multiple: deal too risky. If base + downside both positive: margin acceptable. Leverage cuts both ways sharply.

How do institutional LPs use this?

Institutional LPs expect sensitivity tables at every underwriting — base case plus at least two stress scenarios. Submit this output alongside traditional pro formas. LPs read quickly for two things: does the base case clear target IRR, and does the stress case produce positive equity multiple. If both yes, deal is investable. If stress goes negative, more equity or a lower purchase price is needed.