Maria Angelica Baldres
Selected Work/Case Study/Commercial Lease Modeling
Case Study · Commercial Lease Cash Flow Forecast

Larkspur Row Shops: which lease expiration needs attention first?

A ten-year cash flow forecast for a fully leased, seven-tenant neighborhood retail center. The rent roll, lease abstracts, operating budget, and leasing assumptions were entered into an existing commercial lease model, checked, and traced back to the leases that drive each result. Every current lease expires within the forecast, so the useful questions are when income weakens, by how much, and which tenant decision comes first.

See the Forecast Two Leases to Watch
Synthetic caseConstructed for portfolio purposes. The property, owner, tenants, and lease records are fictional. The model inputs, checks, and interpretation are real work.
Ten-year lease forecast · base case 7 of 7 leases expire by 2035
Larkspur Row Shops
24,000 SF · 7 Suites · Neighborhood Retail · Oct 2026 to Sep 2036
10-year NOI
$6.92M
Before leasing costs and reserves
Tenant cash flow
$6.34M
After TI, commissions, reserves
Rollover costs
$668K
Free rent, TI, commissions
Weakest year
$430K
Year 7 cash flow; Year 1 is $655K
Largest tenant
35.1%
Share of Year 1 rent + reimbursements
WALT
4.7 yrs
Area-weighted, from 9/30/2026
Base case from the completed lease model (Summary and Annual CF sheets). Model years run October to September.
24,000 SF · 7 suitesPharmacy anchor plus six shop tenants; 100% leased
120-month forecastMonthly cash flow, summarized in ten model years
7 expirations in 10 yearsFrom December 2027 to January 2035
Existing lease modelPopulated from the lease package and checked
02 · The Question

A fully leased center with every lease rolling.

The owner’s question

“What income can this property’s leases generate over the next ten years, when could cash flow weaken, and which lease expiration needs attention first?”

Redfern Holdings, a family-owned company, holds Larkspur Row Shops for the long term and is not selling or refinancing. The center is fully leased today, but all seven leases expire before September 2036, and the largest tenant occupies 40% of the space. The owner wanted to see what the current leases can produce, where the soft spots are, and which expiration to deal with first.

The rent roll, lease abstracts, and rent schedules supply the contractual terms. The operating budget mixes documented figures, such as the tax bill and service contracts, with estimates for insurance, utilities, and repairs, plus assumed growth and reserve rates. Renewal odds, downtime, market rents, concessions, and leasing costs came from the leasing broker’s guidance and the owner’s selections, and are treated as forecast assumptions throughout.

Owner
Redfern Holdings LLC
Property
Neighborhood strip center
Analysis date
September 30, 2026
Horizon
10 years, to Sep 2036
Average in-place rent
$27.78 / SF / yr
Year 1 budget, before mgmt fee
$284,400 ($11.85 / SF)
Expense terms
6 NNN · 1 modified gross
Credit loss · discount rate
1% of base rent · 8%
03 · Rent Roll

Seven leases, one tenant that carries the most weight.

The table sets the contractual lease terms beside the assumption that shapes each tenant’s future most: the chance it renews. Rents are the rates in effect on October 1, 2026.

Suite · tenant SFLease Shareof center Rent$ / SF / yr Contract increasesLease Expense termsLease ExpiresLease Renewal oddsAssumption
100 · Alderleaf PharmacyAnchor; two 5-year options at market9,50039.6%$23.1010% every 5 yearsNNNFeb 28, 203375%
200 · Copperleaf Home GoodsNo renewal option left; sales flat4,50018.8%$30.403% per yearNNNDec 31, 202750%
300 · Harbor Street TacosRestaurant; one 5-year option2,0008.3%$38.00+$1.00 / SF per yearModified gross: taxes, insurance, CAMMay 31, 203060%
400 · Lumen Nail BarSmall operator; one 5-year option1,5006.3%$34.973% per yearNNNAug 31, 203150%
500 · Brightview Family DentalHeavy build-out; two 5-year options2,2009.2%$32.472.5% per yearNNNJun 30, 203280%
600 · Ironline Fitness StudioFitness; one 5-year option2,80011.7%$23.50+$0.50 / SF per yearNNNApr 30, 202950%
700 · Summit WirelessExtended in 2025; one 5-year option1,5006.3%$29.873% per yearNNNJan 31, 203550%
Total / weighted average24,000100%$27.78Jun 2031
Lease terms from the Rent Roll, Lease Abstracts, and Rent Schedules tabs of the data package. Renewal odds from the Leasing Assumptions tab (owner’s selections within the broker’s ranges). The weighted average expiration (Summary I13) is weighted by area.

How concentrated the income is

Alderleaf Pharmacy leases 39.6% of the center and produces 35.1% of Year 1 base rent and expense reimbursements. Copperleaf adds 20.2%, so two tenants account for 55.3% of the income. The other five suites each contribute between 6.6% and 10.5%.

That spread shapes the rest of the analysis. A rollover at one of the five smaller suites moves the forecast by tens of thousands of dollars; the outcome at Suite 100 moves it by far more, simply because of its size.

The area-weighted remaining lease term is 4.7 years. Only Alderleaf and Summit Wireless have more than six years left; four of the seven leases end within five years.

Share of Year 1 rent and reimbursements
Base rent plus expense reimbursements by tenant, Oct 2026 to Sep 2027, from the CRE Leases cash flow blocks.
Alderleaf Pharmacy39.6% of area35.1%
Copperleaf Home Goods18.8% of area20.2%
Ironline Fitness Studio11.7% of area10.5%
Brightview Family Dental9.2% of area10.2%
Harbor Street Tacos8.3% of area10.0%
Lumen Nail Bar6.3% of area7.3%
Summit Wireless6.3% of area6.6%
04 · Ten-Year Forecast

Income grows over ten years, but not in a straight line.

Contract increases and assumed market rent growth lift base rent from $672,556 in Year 1 to $853,811 in Year 10, and NOI follows from $661,022 to $845,273. Two years break the pattern, and the gap between NOI and cash flow shows why.

10-year NOI
$6.92M
After operating costs, before leasing costs and reserves
Total tenant cash flow
$6.34M
After $319K TI, $191K commissions, $69K reserves
Present value at 8%
$4.31M
Ten years of tenant cash flow only; not a property value
Costs recovered
96.6%
$3.58M reimbursed of $3.70M operating costs
NOI and cash flow by model year
Each full bar is NOI. The solid base is total tenant cash flow; the segments above it are what was spent that year on improvements, commissions, and reserves. $ thousands.
Total tenant cash flowTenant improvementsLeasing commissionsCapital reserves
View data
YearNOITICommissionsReservesCash flow
Y1661,02200(6,000)655,022
Y2547,825(57,938)(41,940)(6,180)441,767
Y3638,528(44,558)(21,075)(6,365)566,529
Y4651,947(37,153)(20,870)(6,556)587,368
Y5692,54400(6,753)685,791
Y6681,239(48,805)(32,062)(6,956)593,416
Y7611,789(113,435)(61,144)(7,164)430,046
Y8796,69100(7,379)789,312
Y9789,981(17,101)(13,654)(7,601)751,625
Y10845,27300(7,829)837,444

Three measures, three questions

NOI shows what the leases earn after operating costs. Total tenant cash flow subtracts what the owner spends to keep space leased and the building maintained: tenant improvements, leasing commissions, and capital reserves. Present value discounts those cash flows at the owner’s 8% rate. It leaves out any purchase price, sale value, and financing, so it is not an estimate of what the property is worth.

In quiet years, NOI and cash flow differ only by the reserve of $6,000 to $7,800. In Years 2 and 7 the gap widens to $106,058 and $181,743, because improvements and commissions for a new or renewed lease are paid in a single month.

Year 8 NOI is 30% higher than Year 7: Suite 100 is back at full rent, with no downtime or free rent left in the year, and every suite is occupied from Year 8 on except for Summit Wireless’s short rollover in Year 9.

Annual pro forma ($)Y1Sep 2027Y2Sep 2028Y3Sep 2029Y4Sep 2030Y5Sep 2031Y6Sep 2032Y7Sep 2033Y8Sep 2034Y9Sep 2035Y10Sep 203610-year
Base rent672,556620,998680,229689,990721,373714,059700,385804,739814,055853,8117,272,194
Free rent0(32,155)(16,919)(18,167)(19,922)(16,297)(45,374)0(9,659)0(158,493)
Credit loss (1%)(6,726)(5,888)(6,633)(6,718)(7,015)(6,978)(6,550)(8,047)(8,044)(8,538)(71,137)
Expense reimbursements320,472294,366324,326339,352362,069363,999344,333399,375403,710423,6993,575,701
Effective gross revenue986,302877,320981,0031,004,4571,056,5061,054,783992,7941,196,0661,200,0621,268,97210,618,265
Operating expenses(325,280)(329,495)(342,475)(352,510)(363,962)(373,544)(381,005)(399,375)(410,081)(423,699)(3,701,426)
Net operating income661,022547,825638,528651,947692,544681,239611,789796,691789,981845,2736,916,838
Tenant improvements0(57,938)(44,558)(37,153)0(48,805)(113,435)0(17,101)0(318,990)
Leasing commissions0(41,940)(21,075)(20,870)0(32,062)(61,144)0(13,654)0(190,745)
Capital reserves(6,000)(6,180)(6,365)(6,556)(6,753)(6,956)(7,164)(7,379)(7,601)(7,829)(68,783)
Total tenant cash flow655,022441,767566,529587,368685,791593,416430,046789,312751,625837,4446,338,320
Average occupancy100%90.6%96.1%97.2%99.5%97.4%90.1%100%98.4%100%96.9%
Operating costs recovered98.5%89.3%94.7%96.3%99.5%97.4%90.4%100%98.4%100%96.6%
Annual CF sheet, rows 5 to 33, and Summary rows 20 and 21. Model years end September 30. The ten-year total ties to Monthly CF A34 and Summary B12 ($6,338,320).
05 · Where Cash Flow Dips

Cash flow dips when leases roll, deepest in Years 2 and 7.

Every current lease expires inside the forecast. The timeline shows when each suite is modeled as empty, when free rent applies, and the month improvements and commissions are paid. Suites are listed in order of expiration.

Lease expiration and re-leasing timeline
Each row is a suite, Oct 2026 to Sep 2036. Downtime and free rent are the model’s probability-weighted months (see section 07).
Current leaseModeled downtimeFree rentModeled next leaseTI and commissions paid
View data
SuiteLease endsDowntimeTI & LC paidFree rent
200 CopperleafDec 2027Jan to Jun 2028Jun 2028Jul to Oct 2028
600 IronlineApr 2029May to Aug 2029Aug 2029Sep to Dec 2029
300 Harbor StreetMay 2030Jun to Sep 2030Sep 2030Oct to Dec 2030
400 LumenAug 2031Sep to Nov 2031Nov 2031Dec 2031 to Jan 2032
500 BrightviewJun 2032Jul to Aug 2032Aug 2032Sep 2032
100 AlderleafFeb 2033Mar to May 2033May 2033Jun to Jul 2033
700 SummitJan 2035Feb to Apr 2035Apr 2035May to Jun 2035
Year 2 · Oct 2027 to Sep 2028

Copperleaf rolls first

The lease ends December 31, 2027. The model leaves the suite empty from January to June 2028, pays $99,878 of improvements and commissions in June, then applies four months of free rent. NOI falls 17% from Year 1 and cash flow falls by a third.

Cash flow $441,767 · NOI $547,825
Year 7 · Oct 2032 to Sep 2033

Alderleaf is the largest single event

Only three months of downtime are modeled, because a 75% renewal chance is assumed, but the suite is 40% of the center. Occupancy drops to 60.4% for those months, and May 2033 carries $174,579 of improvements and commissions.

Cash flow $430,046, the lowest year
Years 3 to 6 and 9

Five smaller rollovers

Ironline, Harbor Street, Lumen, Brightview, and Summit each cost $40,000 to $90,000 in free rent, improvements, and commissions. The heaviest of those years is Year 6, when Lumen and Brightview roll ten months apart.

Year 6 rollover costs $97,165
Rollover · model yearDowntimeweightedFree rentTenant improvementsCommissionsTotal in forecastRent / SFfinal contract period to re-leasing startChange
200 Copperleaf · Y26 mo43,19557,93841,940143,073$31.31 to $28.58−8.7%
600 Ironline · Y34 mo24,04644,55821,07589,679$24.50 to $25.20+2.9%
300 Harbor Street · Y44 mo19,92237,15320,87077,944$41.00 to $39.84−2.8%
400 Lumen · Y5 to Y63 mo9,70915,65015,07740,436$39.36 to $38.84−1.3%
500 Brightview · Y62 mo6,58933,15516,98556,728$36.74 to $35.94−2.2%
100 Alderleaf · Y73 mo45,374113,43561,144219,953$25.41 to $28.66+12.8%
700 Summit · Y93 mo9,65917,10113,65440,414$37.84 to $38.64+2.1%
All seven rollovers158,493318,990190,745668,228
From each suite’s cash flow block in CRE Leases (column A totals within the ten-year horizon). The second rent is the rate at modeled re-leasing commencement: the blended renewal and new-tenant market rent, grown 3% a year from the analysis date. It can step up again within the new lease.

Monthly view: four months below zero

Annual totals smooth over the months that need cash. In fully leased months, total tenant cash flow runs at roughly $54,000 to $70,000. It turns negative in June 2028 (a net outflow of $59,282), August 2029, September 2030, and May 2033 ($145,369). Each is the month a rollover’s improvements and commissions are paid.

These are the months where the timing of leasing costs, rather than the ten-year total, is what the owner has to plan for.

Monthly total tenant cash flow
Monthly CF row 34, Oct 2026 to Sep 2036. $ thousands.
View data
MonthCash flowWhat happens
Oct 202654,100Fully leased start
Jun 2028(59,282)Copperleaf TI and commissions
Aug 2029(17,292)Ironline TI and commissions
Sep 2030(8,311)Harbor Street TI and commissions
May 2033(145,369)Alderleaf TI and commissions
Sep 203669,800Final month
06 · Two Leases to Watch

The first decision and the largest exposure are different leases.

Copperleaf expires first, has no renewal option, and faces lower rent either way. Alderleaf expires five years later, but it is big enough that its outcome matters more than any other lease in the center.

Most immediate priority

Copperleaf Home Goods, Suite 200

4,500 SF · expires Dec 31, 2027 · 15 months after the analysis date
Year 1 income share20.2%
Renewal odds50%
Rent after rollover−8.7%

Copperleaf will pay $31.31 per SF in its final lease year, above both the broker’s renewal estimate ($27.50) and new-lease estimate ($28.00) at today’s rent level. Either way, the suite is likely to earn less after 2027. What a renewal protects is not today’s rate but the months of vacancy and the re-leasing costs.

With the earliest expiration, no option left, and an even chance of renewal assumed, this is where the owner has the least time and the least contractual certainty.

Assumption input
If it renews
If it leaves
Downtime
None
12 months
Free rent
2 months
6 months
Improvements
$5 / SF · $22,500
$20 / SF · $90,000
Commission, years 1 to 5
3%
6%
Term
7 years
10 years

Leasing assumption inputs at today’s cost level. The model blends the two columns 50/50 rather than forecasting each separately.

Largest longer-term exposure

Alderleaf Pharmacy, Suite 100

9,500 SF · expires Feb 28, 2033 · Year 7 · option notice due 12 months before
Share of center39.6%
Renewal odds75%
Share of rollover costs33%

Even with a 75% renewal chance built in, Alderleaf’s rollover is the costliest in the forecast at $219,953, one-third of all rollover costs, and it produces the weakest year. The model re-leases the suite at $28.66 per SF against $25.41 in its final contractual rent period (it pays $23.10 today), because the $24.00 market rent assumption grows 3% a year until 2033. That increase holds only if the market growth assumption does.

The weighted case shows three months of vacancy. If the tenant left, the assumptions call for the figures in the right-hand column on 40% of the building. That outcome is not modeled separately here, but it is the largest downside in the rent roll.

Assumption input
If it renews
If it leaves
Downtime
None
12 months
Free rent
None
8 months
Improvements
$5 / SF · $47,500
$25 / SF · $237,500
Commission, years 1 to 5
3%
6%
Term
5 years
10 years

Leasing assumption inputs at today’s cost level; the model weights them 75/25.

07 · What Moves the Numbers

The rent schedules are fixed. The rollovers are judgment.

Existing rent steps come straight from the leases. Almost everything that changes the shape of the forecast after each expiration is an assumption, and five mechanics account for most of it.

ConventionProbability-weighted re-leasing

The model does not run a renewal case and a vacancy case side by side. At each expiration it builds one expected lease: downtime, free rent, rent, term, improvements, and commissions are each blended by the renewal probability. At 50%, Copperleaf gets six of the twelve downtime months and a rent halfway between the renewal and new-lease estimates.

The result is a blended planning forecast, not a probability-weighted average of separately modeled outcomes. A real rollover either renews with no gap or goes through the full downtime, and its cash flow could differ substantially from the blended line. The dips in section 05 show where rollover risk sits in time, not scheduled events.

DowntimeExpense recovery

Tenants repay 98.5% of operating costs in Year 1. The small gap is Harbor Street Tacos’ modified gross lease, which leaves its share of management fees and other costs, about $4,800 that year, with the owner. Recovery falls to 89.3% in Year 2 and 90.4% in Year 7 because an empty suite pays no reimbursements. Over ten years, the owner carries $125,725 of operating costs that tenants do not repay, most of it in downtime months.

ConcessionsFree rent and credit loss

Free rent totals $158,493 and waives base rent only. Tenants in free rent still pay their share of expenses, so those months count as occupied and reimbursements hold up. The 1% credit loss allowance, applied to base rent, removes another $71,137.

Leasing costsImprovements and commissions

Improvements ($318,990) and commissions ($190,745) are paid as lump sums in the month before modeled lease commencement, before any free-rent period. Commissions are calculated on the full new lease term, including years after 2036. Together with free rent, rollover costs equal 9.7% of ten-year NOI, but they fall in a handful of months.

Market rentGrowth assumption

Re-leasing rents start from the broker’s current estimates and grow 3% a year from the analysis date. The later the expiration, the more this assumption matters: it turns Alderleaf’s 2033 rollover into a 12.8% rent increase and Summit Wireless’s 2035 rollover into a 2.1% increase, while Copperleaf’s early rollover still lands below its final contractual rent. None of the existing lease schedules depend on it.

08 · Implications

What the forecast means for the owner.

Reading the base case

Copperleaf needs attention first. Alderleaf carries the most weight.

The base case shows income rising over ten years, with two expirations responsible for most of the variation along the way. Neither result is certain. Both depend on renewal and downtime assumptions the owner can test with the tenants and the leasing broker well before the leases end.

Now to Dec 2027Copperleaf renewal

There are 15 months between the analysis date and the expiration. Because renewal rent is expected to be below today’s rate, a renewal proposal can be judged against the re-leasing cost in this forecast: $143,073 of free rent, improvements, and commissions, plus a weighted six months of vacancy.

2028 and 2033Cash timing

The $0.25 per SF capital reserve ($6,000 to $7,800 a year) is sized for building work, not leasing. Improvement and commission payments in June 2028 and May 2033 would come from operating cash unless money is set aside ahead of those months.

Before Feb 2032Alderleaf’s plans

The pharmacy’s option notice is due 12 months before its February 2033 expiration. Given its share of the center, an early read on its intentions is worth more than for any other lease, and the 75% renewal assumption is the single input most worth confirming.

2030Harbor Street terms

The model assumes the next lease for Suite 300 is NNN. Holding to that closes the only structural gap in expense recovery.

EvidenceInputs to firm up

Renewal odds for Suites 100 and 200, the downtime estimates, and the 3% market rent growth rate set the timing and depth of the dips. Better evidence on those would narrow the forecast more than refining any other input.

09 · The Lease Model

The completed model, open for inspection.

The forecast runs in an existing commercial lease model framework, with its calculation logic kept as built. The work shown here is the translation of the lease package into the model’s inputs and rent schedules, the checks, and the interpretation.

Larkspur Row Shops · CRE Lease ModelGoogle Sheets · Summary, CRE Leases, Expenses, Monthly CF, Annual CF · base case
Open the lease model ↗

Key cells from the Summary sheet. Blue values are inputs; black values are calculated by the model. The tenant block shows Suite 200, the tenant currently selected in cell L2.

Property & analysis
B2Analysis start date9/30/2026
B3Analysis length10 years
B5Number of suites7
B6Net leasable area24,000 SF
B7Going-in occupancy100%
B9WALT4.73 years
Ten-year results
B8Average annual occupancy96.9%
G13Weighted average rent$27.78 / SF
B12Total tenant cash flow$6,338,320
B13Discount rate8.0%
B14Discounted tenant cash flow$4,305,086
B17Credit loss, each year1.0%
Suite 200 · Copperleaf
L3In-place base rent$175,118
L5In-place reimbursements$76,610
L10Re-leasing base rent$1,210,211
L11Re-leasing free rent($43,195)
L13Re-leasing improvements($57,938)
L14Re-leasing commissions($41,940)
InputCalculated
8 checks completed; timing exception disclosed 0 formula errors 0 input value mismatches; one commission timing difference disclosed Built on an existing lease model framework; inputs, rent schedules, and review by the author.
Source data
Larkspur Row Shops Synthetic Data PackageRent roll, lease abstracts, rent schedules, operating budget, leasing assumptions, TI and commission terms, and analysis settings used to populate the model.
Open source data ↗
10 · Method & Limits

From lease documents to a forecast an owner can use.

The work followed the path a lease review usually takes: read the documents, express them in the model’s terms, prove the model reflects them, and only then interpret the output.

01

Abstract

Pull areas, dates, rent steps, expense terms, options, and past concessions from the rent roll, abstracts, and rent schedules.

02

Translate

Rebuild each rent schedule to its increase pattern (percentage, fixed dollar, five-year steps, an extension term), convert the annual budget to monthly inputs, and set the re-leasing assumptions.

03

Check

Reconcile inputs to the source, confirm timing month by month, and tie monthly results to the annual report and summary.

04

Interpret

Trace each weak year and month to the lease and assumption behind it, and separate contractual results from assumption-driven ones.

One re-leasing cycle per suiteThe model re-leases each suite once. Terms were checked to run past September 2036, so the horizon is unaffected, but later rollovers are outside its scope.
Blended, not scenario-basedRenewal and new-tenant assumptions are blended into one modeled lease (section 07). Separate renew and leave cases were not run.
Re-leasing rent growthNew lease rents grow with the 3% market assumption from the analysis date, with no separate escalation schedule for the new lease.
One expense growth rateAll expense lines and reserves grow 3%. CAM and other costs grow monthly, so Year 1 CAM is $87,582 against the $86,400 budget.
Monthly timingRent is charged in whole months and leasing costs in single lump sums; model years run October to September.
Lease cash flows onlyNo purchase price, financing, sale, or capital projects beyond the reserve. The discounted figure is a present value of lease cash flows, not a valuation.
Synthetic case study. Larkspur Row Shops, Redfern Holdings LLC, the tenants, leases, operating budget, broker guidance, and market comparables are fictional and were created for this portfolio project. This was not a client engagement, the figures are not real client results, and nothing on this page is investment, legal, or tax advice. The forecast uses the commercial real estate lease model template from Break Into CRE; the lease inputs, rent schedules, checks, and interpretation are the author’s own work.