On this episode, Fort Capital CEO Chris Powers outlines the underwriting process on industrial deals from start to finish making it simple to understand whether you’re green or a seasoned veteran. This episode will provide an outline for how these deals get done and the mistakes that a lot of people make along the way so you can deal smarter in the future. Enjoy!
For more on Underwriting, visit the Fort Capital website here.
Follow Chris on Twitter: www.Twitter.com/FortWorthChris
Learn more about Chris Powers & Fort Capital: www.FortCapitallp.com
(01:07) - What is Underwriting?
(02:14) - Variables that Contribute to the Value in Underwriting
(02:40) - Market, Demographic and their Respective Trends
(03:50) - Purchase Price
(04:15) - Expenses
(05:04) - Modeling Expenses Out in a 5-Year Model
(05:21) - Taxes & Insurance
(06:15) - Tenants
(07:03) - Where Rent is Today vs. the Market Rate
(07:59) - Tenant Renewal Probability
(09:55) - Current Vacancies
(10:42) - Capital Expenditure Requirements
(11:44) - Tenant Improvement Costs
(12:26) - Underwriting the Capital Structure & Refinance Scenarios
(13:49) - What does an exit scenario look like?
(15:15) - Things People Miss and Mistakes We’ve Missed Along the Way
(18:45) - How Fort Capital Thinks About the Process of Doing a Deal
(19:59) - How Long the Underwriting Process Should Take
(20:42) - Where We Get Most of Our Data
(21:12) - Where does information live when underwriting? How is it communicated to the team & non-team?
(22:58) - Final Thoughts on Underwriting
(23:58) - Writing an Investment Memo
(25:10) - What We Think about Presenting in Our Memos
(26:12) - Reasons to Acquire
(26:38) - Location Overview
(27:09) - The Property Itself
(27:35) - Tenant Overview
(28:10) - Sources and Uses of Funds
(29:02) - Financial Summary & What Investors Can Expect in Return
(30:22) - Partnership Terms
(31:48) - Models & Return Summary
(32:17) - Property Photos & Market Map
(33:02) - Conclusion & Free Resources from Fort Capital
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