Separate the sources of income
Prepare an apartment rent roll and a commercial lease summary. For each commercial tenant, identify base rent, lease dates, renewal options, rent adjustments and reimbursement obligations. Keep collections separate from amounts billed or expected.
NSRA’s published history includes a range of mixed use assignments across the region. The relevant comparison for a new offering depends on its actual tenant mix and lease structure, rather than the shared mixed use label.
Explain who pays the bills
Read the signed lease and amendments before describing a tenant as responsible for taxes, insurance or maintenance. A reimbursement may be capped, limited to particular expenses or based on a specified allocation. The documents and collection history should support the income shown in the offering.
For illustration, if a property incurs $20,000 in an operating cost and actually receives $8,000 in reimbursement, the net owner burden is $12,000. An underwriting presentation can show the full cost and corresponding income or a consistently explained net figure. It should not count the reimbursement twice or assume the full cost disappears.
Model rollover as an operating event
A lease expiration does not automatically produce higher income. Re leasing can involve downtime, brokerage costs, legal expenses, tenant improvements and concessions. The appropriate assumptions depend on the specific space, proposed use and available evidence.
- Identify the actual expiration date and any renewal rights.
- Distinguish contractual rent changes from hoped for future rent.
- List known owner obligations at a tenant change.
- Show the estimated time and capital needed for a lease up scenario.
- Keep the current operating case visible beside that projection.
Connect the lease review to the building review
Available records should help explain access, utility metering, common spaces and the relationship between residential and commercial uses. If a buyer proposes a new use or alteration, have the appropriate municipal and professional reviews address feasibility. Existing occupancy or an assessment description alone does not establish approval for a proposed change.
For an owner occupying some of the commercial space, distinguish the owner’s business operations from the real estate income. Discuss the intended occupancy arrangement after sale, including whether a new lease is contemplated. Buyers and lenders need a clear account of that arrangement.
Prepare for pricing and buyer questions
Collect leases, amendments, payment history, operating statements, building records and a capital work summary. Then compare the property with transactions that have sufficiently similar income and risk characteristics. A headline cap rate is difficult to interpret without knowing how income and expenses were calculated.
NSRA’s mixed use sales service connects that analysis with marketing and execution. Explore our regional coverage, or begin with a broker opinion of value.