25 basis points moves the price
A quarter-point on the exit cap can be worth more than everything you negotiated. If you have not tested it, you have not priced it.
Real Estate Underwriting Scenario Builder
The same deal under different assumptions — upside, downside, value-add, refinance, or solved backwards from the return you need. Change one thing and everything downstream is worked out again in seconds.
The Stakes
One Assumption Is Carrying Your Whole Return
Usually the exit cap. Sometimes rent growth, sometimes the lease-up. A base case on its own cannot tell you which — it hands you a single number with decimal places and no sense of how hard it would be to break. The deals that go wrong are rarely the ones that looked bad.
Copies of the file drift apart
The base case gets corrected twice, the downside once. Now the two disagree about the unit count and the comparison means nothing.
So the downside never gets built
It takes half a day nobody has — which is why so many deals close on one case and a hopeful conversation about risk.
What Changes
One Deal, Several Cases — Not Several Spreadsheets
A scenario is not a copy. It is the same property, the same rent roll and the same approved figures, with one or two assumptions changed and everything that follows worked out again — the cash flow, the loan, the distributions, the returns. One set of facts sits under all of them, so the difference between two cases is only ever the thing you changed.
The Cases
What a Commercial Deal Actually Needs Tested
Base
Hold as-is. The reference case everything else is measured against.
Upside and downside
The same deal with rent growth, vacancy and the exit cap moved by a band you can defend — not by round numbers picked to make the page look balanced.
Value-add
Renovation to a rent premium: budget per unit, the premium itself, how fast units turn, and the downtime it costs while they do.
Refinance
A refi mid-hold — the year, the takeout terms, whether proceeds distribute — with both loans carried properly through to the returns.
Reverse solve
"What could we pay?" Set the return you need and the price becomes the answer instead of the input.
Each is a full underwriting in its own right, not a summary with a few figures swapped. A value-add case carries its own renovation spend and the higher vacancy while units are down; a refinance case carries both loans. What stays identical underneath is the property and the maths, which is what makes them comparable at all.
Sensitivity
Move One Thing, Hold Everything Else Still
An upside and a downside are your base case with the growth, loss and exit assumptions moved — and nothing else. Not the financing, not the unit mix. If two things change at once, the difference in IRR cannot be attributed to either.
Use bands you can defend rather than round numbers: a hundred to two hundred basis points on rent growth and the exit cap, two or three points on vacancy. A downside built from figures nobody can source is a story, not a test.
Financing
Turn the Question Around: What Could We Pay?
Set the return you need and the price becomes the output, with every other assumption held at your base case — so the answer is what the deal supports under assumptions you already reviewed. It comes back with its sensitivity, because a solved price on its own looks more certain than it is.
Financing usually has more leverage over the outcome than anything else, so loan structures compare the same way — each sized on LTV, DSCR or a fixed amount, with DSCR and debt yield reported per year against each one. What each does to the investor's return follows automatically.
New loanAssumptionBridgeSupplementalRefinance
The Payoff
Know What Breaks the Deal Before You Sign It
Not a folder of cases — an answer to the question that matters: how much has to go wrong before this stops working, and which assumption gets you there first. That is what you take to an investment committee, and it is the difference between saying a deal is conservative and showing it. All of it runs on the proforma underneath, built from figures you approved.
FAQ
Questions About Scenario Analysis
What is scenario analysis in real estate underwriting?
Running the same deal under different assumptions to find out which ones the outcome actually depends on. A base case says what you expect; a downside says what happens if rent growth is 150 basis points lower and the exit cap widens. The value is not in any single answer — it is in learning which assumption is carrying your return.
How is this different from copying my spreadsheet?
A copy starts drifting the moment you correct one file and not the other. Here every case sits on the same property and the same approved figures, so a fix to the rent roll fixes all of them at once, and the gap between two cases is only ever the assumption you changed.
Can Cygni solve for the purchase price?
Yes. Give it the return you need — a target IRR or a cash-on-cash floor — and it works backwards to what you could pay, with every other assumption held at your base case. It comes back with its sensitivity too, because a price on its own hides how much of it rests on the exit cap.
Do I have to rebuild anything to run a new case?
No. Change the assumption and the cash flow, the loan schedule, the distributions and the returns are all worked out again. Nothing is re-entered, so nothing drifts.
Find Out What Your Return Really Rests On
Build the base case from a real deal, then move one assumption at a time and watch which one actually matters.