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Framework•5 min read

Deal Teardown Template

A reusable framework for analyzing deals. Use this structure to organize your thinking, communicate with partners, and make better investment decisions.

How to Use This Template

This is a structured way to break down any commercial real estate deal. It forces you to answer the questions that matter before you commit capital.

Copy this structure, fill it out for each deal, and share it with partners or advisors for feedback.

1. Deal Summary

Property Type: [Industrial / Self-Storage / Retail / Medical / etc.]

Address/Market: [City, submarket, ZIP]

Purchase Price: [$X.XM]

Size: [SF or units]

Year Built / Renovated: [YYYY / YYYY]

Occupancy: [X%]

Seller Story: [Why are they selling? Estate, reposition complete, 1031, etc.]

2. Market Context

Submarket Dynamics: [Supply/demand trends, absorption, vacancy rates]

Competitive Set: [Who are the comparable properties? What are their occupancies and rents?]

New Supply: [Any new construction in the pipeline? How many SF/units?]

Demographics (if relevant): [Population density, income, growth trends]

Access & Visibility: [Highway access, traffic counts, anchor tenants nearby]

3. Rent Roll & Tenant Quality

Largest Tenants: [List top 3-5 tenants by % of NRA]

Lease Expiration Schedule: [What % of leases roll in next 12/24/36 months?]

In-Place vs Market Rents: [Are rents below, at, or above market?]

Tenant Credit: [Investment-grade, regional, mom-and-pop?]

Co-Tenancy / Kickout Clauses: [Any problematic lease provisions?]

4. Financial Snapshot

T-12 NOI: [$XXX,XXX]

Pro Forma NOI (Stabilized): [$XXX,XXX]

Going-In Cap Rate: [X.X%]

Loan Terms: [X% LTV, X% rate, XX years amort]

DSCR: [X.XXx]

Debt Yield: [XX%]

Year 1 Cash-on-Cash: [X%]

Projected 5-Year IRR (Base Case): [XX%]

5. Key Assumptions

Rent Growth: [X% annually]

Expense Growth: [X% annually, or by category]

Vacancy / Downtime: [X% during hold]

CapEx Reserves: [$X/SF or $X/unit annually]

TI / Leasing Commissions: [$X/SF on rollovers]

Exit Cap Rate: [X.X%]

Hold Period: [X years]

6. Sensitivity Analysis

What happens if...

Occupancy drops 10%: [Impact on DSCR and IRR]

Rent growth is only 1% (not 3%): [Impact on exit value]

Expenses grow 5% instead of 3%: [NOI compression impact]

Exit cap rate is 50 bps higher: [Exit value and total returns]

Largest tenant leaves at renewal: [Downtime + TI cost + impact on NOI]

7. Red Flags & Risks

• [E.g., "Property taxes are assessed at 50% of purchase price — expect reassessment"]

• [E.g., "Largest tenant (40% of NRA) has co-tenancy clause tied to anchor"]

• [E.g., "New 200k SF competing property breaking ground 2 miles away"]

• [E.g., "Deferred maintenance: roof is 20 years old, no recent HVAC upgrades"]

• [E.g., "Seller refused to provide tenant sales data for percent rent verification"]

8. Questions to Ask the Broker

• Why is the seller selling now?

• Have there been any price reductions? How long has it been on market?

• What's the highest and best use of the property? Any zoning upside?

• Are there any known deferred maintenance items or upcoming capital needs?

• What's the tenant retention history over the past 5 years?

• Have any tenants requested rent relief or modifications recently?

• What tenant improvement allowances are market standard for this property type?

• Are there any environmental concerns or Phase I/II reports available?

• What's the property tax assessment history? Any recent appeals?

• Are there any upcoming zoning or infrastructure changes in the area?

9. Investment Decision

Go / No-Go / Re-Trade

Decision: [Go / No-Go / Re-Trade to $X.XM]

Rationale: [2-3 sentence summary of why this deal works or doesn't work]

Key Value Drivers: [What will move the needle? Rent growth, lease-up, expense reduction?]

Exit Strategy: [Hold to stabilize and sell, refi and hold, 1031 into larger asset?]

How to Use This in Practice

  • →Create a new teardown document for every deal you seriously evaluate.
  • →Share with partners, advisors, or lenders for feedback before making an offer.
  • →Use this to compare multiple deals side-by-side (apples to apples).
  • →After closing, revisit your teardown quarterly to see how reality compares to your assumptions.

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