Begin with a defensible NOI
Reconcile contractual income to collections and subtract normalized property operating expenses. Review recurring expenses that may move after a sale, especially taxes and insurance. Keep financing payments outside NOI so the property and capital structure can be tested separately.
Run the debt case
Use the proposed loan amount, rate, amortization, reserves, and transaction costs. Calculate annual debt service and debt service coverage, then test a slower lease-up, higher expense load, or refinance at a different rate. The same advertised cap rate can produce very different equity cash flow under different debt terms.
Make the decision visible
Place the base case beside a downside case. Identify the variable that would break coverage or eliminate the target return, and ask whether the price, financing, or business plan can absorb it. A clean decision matters more than a single attractive output.
CBRE 2026 Capital Markets Outlook
Original source: https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/capital-markets
External research provides market context. The decision framework above is Prestige Estate Advisors' own analysis; it is not a report on any current assignment.
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