A full walkthrough — sources & uses, DSCR and debt yield, a 10-year cash flow with contractual rent bumps, and exit IRR — built entirely with REProforma's free Commercial/NNN tool.
About this deal: this is a representative deal built to reflect realistic 2026 single-tenant NNN market terms — benchmarked against CBRE's 2026 cap rate survey and typical dollar-store ground-lease structures — not a closed transaction. It's used here to show, end to end, how the tool underwrites a real deal.
A small investor is looking at a 9,100 SF single-tenant retail building — the kind of deal a regional bank or private investor evaluates constantly, but where quality underwriting tools usually sit behind a $200+/month subscription or an institutional Excel model. Can a free, browser-based tool produce a bank-grade, defensible answer to: is this a deal worth doing, and what happens to the equity if it doesn't go perfectly?
| Input | Value |
|---|---|
| Property | 9,100 SF single-tenant retail, Milford, DE |
| Lease structure | Absolute NNN (tenant pays all opex) |
| Tenant credit | Investment grade |
| Annual base rent | $78,000 ($8.57/SF) |
| Rent escalations | 10% every 5 years |
| Lease term remaining | 12 yrs + 4 × 5-yr renewal options |
| Purchase price | $1,115,000 ($122.53/SF) |
| Going-in cap rate | 7.00% |
| Financing | 65% LTV, 6.50%, 25-yr amortization |
| Hold period | 10 years |
| Exit cap rate | 7.25% (25 bps above entry) |
| Uses | Amount | Sources | Amount |
|---|---|---|---|
| Purchase Price | $1,115,000 | Loan (65% LTV) | $724,750 |
| Closing Costs (1.5%) | $16,725 | Equity Required | $406,975 |
| Total Uses | $1,131,725 | Total Sources | $1,131,725 |
The scheduled Year 6 rent bump (+10%) is the single biggest driver of return — NOI steps from $77,090 to $84,890 and holds flat until the next bump, which falls just after the modeled exit in Year 10.
| Years | Rent | NOI | Debt Service | Cash Flow | DSCR |
|---|---|---|---|---|---|
| 1–5 | $78,000 | $77,090 | $58,723 | $18,367 | 1.31× |
| 6–10 | $85,800 | $84,890 | $58,723 | $26,167 | 1.45× |
| Exit NOI | $84,890 |
| Sale Price (7.25% exit cap) | $1,170,897 |
| Selling costs (2%) | –$23,418 |
| Loan payoff | –$561,764 |
| Net Sale Proceeds | $585,715 |
This deal comfortably clears typical lender coverage tests in Year 1 and gets safer over the hold as the Year 6 rent bump widens the DSCR cushion. The 8.28% levered IRR sits just above the tool's default 8% target — not an outlier, but a clean, bankable deal, which is realistically what most single-tenant NNN retail underwriting looks like in this rate environment.
This case study is the exact workflow a bank credit analyst or a first-time NNN buyer would run before committing capital: cap rate check → sources & uses → DSCR/debt yield lender tests → 10-year cash flow with contractual rent bumps → exit sensitivity — done for free, in a browser, in under two minutes. That combination of real formulas, real lender thresholds, and zero cost is the specific gap REProforma is built to close, and it's the same workflow a real user (a banker evaluating live deals) described using the tool for.
Input your rent schedule, lease structure, and financing terms. Get cap rate, DSCR, debt yield, breakeven occupancy, IRR, and a sensitivity table — with Excel export.
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