How to underwrite concessions for office/who to call
I have a deal that I am trying to figure out how to underwrite concessions on for a spec office (I know I know it's spec). Normally the concessions on multifamily don't get underwritten into the construction loan and you just take the hit on NOI. But if I only have 7 tenants and the majority are getting at least 6 months in rent abatement I'm just not making any money even though I'm technically at stabilization. Anyone have experience with this or know who to call to talk through this with?
[{"id": "hjcavya", "text": "I'd wait for concessions to end before I called it stabilized, but I'm not a professional in this space.", "replies": [], "depth": 1}, {"id": "hjcm4ly", "text": "If you\u2019re doing a DCF then this should be accounted for in your year zero pro forma. If you\u2019re doing direct cap then you can amortize over the balance of the lease", "replies": [], "depth": 1}]