MODEL DESIGN
How to Build an Anchored Retail Shopping Center Pro Forma
Overview
ARTICLE IN PROGRESS
We're writing a deep engineering essay on AQ-301. How we built it, the design choices behind it, and how to use it. The model itself is live and available today.
AQ-301 is the IC-ready pro forma for grocery- or big-box-anchored retail. It supports up to 50 tenants across four segments (anchor, junior anchor, shop, pad), four lease recovery types, and sales-based percentage rent. Anchored retail is a different animal from unanchored strip, and the model is built for that.
Planned Sections
When the full piece is published, it will cover:
- Anchored retail is a different animal: why grocery-anchored centers need a different model.
- Design choice: 4-tier tenant segmentation (anchor / junior anchor / shop / pad).
- Design choice: four lease recovery types (NNN, Modified Gross, Base-Year Stop, Gross).
- Design choice: sales-based percentage rent mechanics.
- Design choice: simple debt sizing vs multi-tranche.
- How to use the model for grocery-anchored acquisition underwriting.
For an example of the engineering-essay format this article will follow, see how we engineered AQ-141, the Multifamily Opportunistic Pro Forma Model.
About the Model
AQ-301 is an Institutional-tier anchored retail pro forma. 10-year cash flows, 4-tier tenant segmentation, four recovery types, sales-based percentage rent. Built for REPE shops and family offices acquiring grocery-anchored or big-box-anchored shopping centers.