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🏬 Commercial Weights

Adjust section and question weights. Changes affect future evaluations only.

Section Weights
Location & Market
16%
Tenant & Lease Structure
18%
Physical Asset
10%
Financial Performance
16%
Value-Add Potential
10%
Debt & Structure
8%
Risk Assessment
12%
Legal & Tax
4%
Total Section Weight 94%

Section weights are relative — they'll be normalized to 100% during scoring.

Location primacy (visibility, access, foot traffic)
%
Main & Main? Corner lot? Signage visibility? Drive-by traffic counts?
Submarket fundamentals
%
Vacancy, absorption, rent trends — strengthening or weakening?
Demographics and trade area
%
Population density? Household income? Daytime population?
Competing supply and new development
%
Other projects in the pipeline? Saturated market?
Parking and access infrastructure
%
Ratio per 1,000 SF? Surface or structured? Easy ingress/egress?
Economic base stability
%
Diversified economy? Government, tech, healthcare anchors?
Public transit and walkability
%
Walk score? Transit score? Important for office especially.
Comparable transaction activity
%
Active investor market? Recent trades at what cap rates?
Co-tenancy and surrounding retail/office mix
%
Complementary businesses nearby? Traffic generators?

Question weights are relative within the section.

Anchor tenant creditworthiness
%
Investment grade? National brand? Local operator risk?
Overall tenant mix and synergy
%
Complementary tenants? Draw traffic to each other?
Weighted average lease term (WALT)
%
5+ years is strong. <3 years = significant rollover risk.
Lease structure quality (NNN, escalations, CAM)
%
Full NNN? Adequate CAM recovery? Annual bumps?
Lease rollover schedule manageability
%
Too many leases expiring in one year? Staggered?
Revenue diversification across tenants
%
No single tenant >25% of revenue? Balanced income stream?
Tenant business health and recession resistance
%
Essential services? Medical? Grocery? Or discretionary?
Tenant improvement and leasing cost exposure
%
Expensive buildouts needed at rollover? TI budgets realistic?
Co-tenancy and kick-out clause risk
%
If anchor leaves, do others get rent reductions or exit rights?
Percentage rent or overage rent potential
%
Retail: any tenants paying percentage rent above base?

Question weights are relative within the section.

Building quality and condition
%
Class A, B, or C? Well-maintained? Modern finishes?
Building systems (HVAC, elevator, fire)
%
Age and condition? Recent upgrades? Capex reserves?
Space flexibility for tenant needs
%
Open floor plans? Demisable? Adaptable for different uses?
Deferred maintenance and capex need
%
Big-ticket items due? Roof, HVAC, elevator, facade?
Curb appeal and common areas
%
Inviting entrance? Clean lobbies? Attractive landscaping?
ADA compliance and accessibility
%
Fully compliant? Any required upgrades?
Technology infrastructure
%
Fiber? Smart building features? Modern HVAC controls?
Energy efficiency and sustainability
%
LEED certified? Energy Star? ESG marketability?

Question weights are relative within the section.

Going-in cap rate vs. market
%
Above or below market cap? Justified by quality?
Projected IRR
%
Return target met? Conservative or stretch assumptions?
Financial projection realism
%
Rent growth, vacancy, TI/LC, expense assumptions all reasonable?
Cash flow stability and predictability
%
Long NNN leases = stable. Short gross leases = volatile.
Below-market rents (loss-to-lease)
%
How far below market? Quick bridge or slow rollover?
Operating expense ratio
%
In line with comps? Room for improvement?
Exit cap rate assumption
%
Is exit cap realistic? 25-50bps expansion from entry?
Capex reserve adequacy
%
Sufficient reserves for tenant turnover, repairs, and surprises?
Downside scenario analysis
%
What if vacancy doubles? Rents drop 10%? Can you survive?

Question weights are relative within the section.

Lease-up or rent growth opportunity
%
Vacant space to fill? Below-market rents to push?
Physical improvement ROI
%
Renovation investment that drives rent increases?
Expense optimization potential
%
Can you cut costs through better management? Technology?
Repositioning or redevelopment
%
Can you change use? Convert office to medical? Retail to mixed-use?
Tenant mix improvement potential
%
Can you replace weaker tenants with stronger ones at higher rents?
Ancillary revenue opportunities
%
Cell tower leases? Parking revenue? Billboard/signage?

Question weights are relative within the section.

Financing terms attractiveness
%
Rate, LTV, IO period — competitive for asset class?
Leverage and DSCR comfort
%
Conservative LTV? Adequate DSCR cushion?
Debt matching business plan
%
Term matches hold period and strategy?
Refinance and rate risk
%
What happens at maturity if rates are higher?

Question weights are relative within the section.

Recession and downturn resilience
%
Essential tenants? Strong credits? Survivable vacancy?
E-commerce disruption risk (retail)
%
Are the retail tenants online-resistant? Services, dining, experiential?
Remote work impact (office)
%
Tenants committed to in-office? Hybrid-friendly floor plans?
Environmental and regulatory risk
%
Phase I clean? Zoning risk? Upcoming regulation?
Insurance and catastrophe exposure
%
Natural disaster risk? Insurance cost trajectory?
Exit market liquidity
%
Active buyer pool for this type and size? Institutional demand?
Obsolescence risk
%
Could this building type become obsolete? Future-proofed?
Property tax reassessment risk
%
What will the new assessment be? Impact on NOI?
Interest rate sensitivity
%
How much does valuation change with a 100bps cap rate move?
ADA, fire code, and compliance costs
%
Any required upgrades? Cost to bring into compliance?

Question weights are relative within the section.

Entity structure and GP/LP terms
%
Standard waterfall? Investor protections? Clawback?
Title and encumbrance review
%
Clean title? Beneficial easements? Any clouds?
Tax planning and depreciation
%
Cost seg? Bonus depreciation? Tax-efficient distributions?
Lease review and enforceability
%
Standard commercial leases? Any unusual provisions?

Question weights are relative within the section.

Overall excitement about this deal
%
On a visceral level, does this fire you up? Or feel like settling?
Trust in the people across the table
%
Would you want to be in a foxhole with these people? Eye contact, handshake feel.
Would this be your only investment this year?
%
If you could only make ONE bet, would it be this one?
Portfolio fit and strategic alignment
%
Does this complement our existing investments? Fill a gap?
LP/partner explainability
%
Could you confidently explain this to investors at the next meeting?
Too-good-to-be-true meter
%
10 = no suspicion at all. 1 = something feels off. Trust your spider sense.
Timing and urgency — is the window right?
%
Right time in the cycle? Market conditions favorable? Or are we chasing?
Differentiation vs. other opportunities
%
How does this compare to other deals you've seen recently?
Sleep-at-night factor
%
Can you sleep well after wiring the money? Or will it keep you up?
Regret minimization — would you regret passing?
%
In 5 years, would you kick yourself for not doing this deal?
Information quality — do you know enough?
%
Do you feel well-informed? Or are there big unknowns?

Question weights are relative within the section.