ROFO Value Calculator

ROFO gives purchase priority. This calculator values.

Expected sale value

ROFO discount %

Tenant purchase probability %

Negotiation term years

ROFO value

$148,750

Gross discount if exercised

$425,000

Prob-weighted value

$148,750

How the math works

Gross discount = sale × rofo discount %. Prob-weighted = gross × purchase probability. Value scales with term.

On $8.5M property with 5% ROFO discount and 35% exercise probability: $425k gross, $149k probability-weighted. Factor in longer term if multi-year. ROFO value is meaningful when tenant has strategic interest; otherwise low.

How to Use

Enter expected sale value.
Enter ROFO discount %.
Enter tenant purchase probability %.
Enter negotiation term years.
Read ROFO value.

Frequently Asked Questions

Typical discount?

Most ROFOs don't specify discount — they give tenant right to make first offer, usually at market. Discount ROFO (where tenant gets defined discount): rare, 5-10%. Most sophisticated ROFOs simply ensure first look + matching rights.

Process?

Landlord notifies tenant of intent to sell/lease. Tenant has defined window (30-90 days) to offer. If accepted, proceed. If rejected, landlord free to market but can't accept offer below tenant's offer (varies by clause).

When valuable?

When tenant is only likely buyer or preferred buyer. Strategic location. Unique business need. Adjacent ownership. In liquid markets with many buyers, ROFO value is low — other buyers will bid up. In thin markets, valuable.