Answer
What can I model in the CRE Build equity waterfall?
Equity & Waterfall: LP/GP tiers with hurdles, splits and promote, plus preferred equity; partner contributions, distributions and multiple. Each tier sets its IRR hurdle, LP split and GP split, and the partner table shows LP and GP contributions, distributions, multiple and IRR, from the same engine as the rest of the model.
Answer
How are sponsor fees handled?
Set acquisition and asset-management fees as percentages and see the dollars each one produces. The fee basis, such as EGI, is shown on screen but can't be changed. The fees sit beside the waterfall tiers, so you can read the sponsor's fees next to the promote.
What you do with it
From the hurdle to each partner's IRR
Tiers with IRR hurdles
Tier, Hurdle, LP split, GP split, Total, LP, GP and Promote, tier by tier.
Partner results
See LP and GP contributions, distributions, multiple and IRR.
Preferred equity
Preferred equity is drawn ahead of common.
Acquisition and asset-management fees
Acquisition fee and Asset management fee sit on one line above the tier table, the second as a % of EGI. Set each percentage and see the dollars it produces.
Everything in one place
Everything the waterfall does
- Equity & Waterfall
- Tier
- Hurdle
- LP split
- GP split
- Promote
- Partner table
- Contributions
- Distributions
- Multiple
- IRR
- Preferred equity
- Acquisition fee
- Asset management fee
Funding order
Equity first or Debt first
Fund equity first or debt first. Funding order lives in Sources & Uses.
How it works
How it works
- 01
Set the tiers
Hurdles, splits and promote.
- 02
Check preferred equity
Drawn ahead of common.
- 03
Set the fees
Acquisition fee and Asset management fee, above the tiers.
- 04
Read partner results
Contributions, distributions, multiple and IRR.
Methodology
How the math works
One calculation engine computes every figure in the model, and the methodology page shows how each one is calculated.
FAQ
Questions
Does the waterfall use IRR hurdles?
Yes. Each tier has an IRR hurdle with its LP split, GP split and promote. The methodology page explains the tiers, including return of capital and pref accrued on unreturned capital.
Can I model preferred equity?
Yes. The Core acquisition template starts with preferred equity, drawn ahead of common.
Which deals have a waterfall?
Every multifamily deal, development or acquisition, has an Equity & Waterfall section. The development template starts with a return-of-capital tier, an 8% preferred return and two promote tiers.
Pricing
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Share a private copy; your lender works in it free and sends back a proposal.
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