MODEL DESIGN
How to Build an Office Lease Rollover Model with Probability-Weighted Retention
Overview
ARTICLE IN PROGRESS
We're writing a deep engineering essay on AQ-201. How we built it, the design choices behind it, and how to use it. The model itself is live and available today.
AQ-201 is the IC-ready office model for the deal where rollover is the story. 120 months of monthly cash flow, up to 50 tenants, full-service gross recovery mechanics, and a toggle between probability-weighted retention and explicit per-tenant renew/vacate decisions. The TI/LC, free rent, and downtime live on the same grid as the rent.
Planned Sections
When the full piece is published, it will cover:
- Office lease rollover is the hardest cash flow in commercial real estate.
- Design choice: 120-month horizon at monthly granularity.
- Design choice: probability-weighted vs binary renew/vacate toggle.
- Design choice: full-service gross (FSG) recovery mechanics.
- Design choice: per-tenant TI/LC, free rent, and downtime modeling.
- How to use the model for IC-ready value-add office 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-201 is an Institutional-tier office value-add pro forma. 120 monthly periods, up to 50 tenants, FSG recovery mechanics, probability-weighted retention. Built for REPE shops, family offices, and brokers underwriting multi-tenant office acquisitions with complex rollover schedules.