Differences in the Real Estate Pro Forma for a Multifamily Property

In this tutorial, we’ve focused on a real estate pro forma for a mixed office/retail property.

This same pro forma also applies to industrial properties because lease terms, revenue, and expenses are similar.

However, there would be some minor differences for a multifamily property (i.e., an apartment building where tenants rent units) because:

Multifamily leases are shorter, simpler, and more similar to each other; and
Tenant Improvements and Leasing Commissions tend to be far less significant as a result.

Tenants are often responsible for Utilities, but not much else, so Expense Reimbursements might be labeled just “Utility Reimbursements.”

And since individuals rather than companies are the tenants, there is a substantial risk of non-payment. That explains why you’ll see “Bad Debt” as a deduction in the Revenue section.

There may also be a new line item for Parking Income, which is what it sounds like.

We show “Loss to Lease,” to represent the difference between market rents and in-place rents, as well, but that is not specific to multifamily – it could appear on almost any pro forma.

Here’s an example multifamily pro forma, with the key differences highlighted: