These are the companion files of How to Read a Real Estate Loan Agreement by Julian R. Sterling.The book on Amazon →
One Excel workbook that prices the cure Chapter 11 praises, now corrected and extended to the other chapters’ figures. Around it, a blank version and a one-page model of your own loan, thirteen working documents to print, forty questions that mark themselves, and three cases the book does not work. All free. Nothing is gated behind a sign-up, and no email address is asked for.
Seven workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 23 September 2026.
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The ratio, in closed form. Deposit cure = k·D − I. Prepayment cure
= L − I/(k·c) = (k·D − I)/(k·c). Divide and everything cancels:
the ratio is 1/(k·c), which on this loan is 11.16 — the
chapter’s 11.2, exactly. It genuinely does not depend on how deep the decline is.
But it depends entirely on the covenant level and the amortisation schedule: 13.7 times
interest-only against a 1.15 covenant, 8.7 times on a twenty-year amortisation
against 1.30. That also joins two chapters the book leaves apart — chapter 3’s
warning about trading amortisation for rate costs the borrower twice, and it is
told about it once.
The window in which the cheap cure works is four points wide. The coverage trap
fires at a 14.0 per cent income decline; the debt yield trap at 18.4. Inside that
4.4-point band, 233,000 dollars makes the problem disappear. Outside it, no
deposit touches a debt yield test and the sponsor writes the large cheque anyway. Which is
chapter 13’s own sentence about a different provision — “optionality that
expires exactly when it acquires value” — applied to one it praises without noticing
the shape. The value is bounded, and the bound is computable at closing:
1,910,586 dollars.
And the chapter sizes its debt yield cure to a threshold the loan does not impose.
It restores 9.00 per cent; chapter 6’s ladder puts the trap at 8.50. Nine is
the origination sizing test. At a twenty per cent decline the covenant requires
729,412 and the worked cure is 2,755,556 — 3.8 times as
much, and the overshoot is largest at the shallow end where a sponsor is least likely to
have cash. Read the eighteen per cent row: the debt yield is 8.54, above the trap.
There is no breach, and the chapter prepays 1,894,444 dollars to cure it.
The extension paydown, priced. Debt service at the extension date is
unchanged — a fixed-payment amortising loan keeps its payment. Sized to clear both
conditions, the paydown is 423,994 at the fifteen per cent decline that denies
the extension. So the two million the chapter floats is generous: it covers a decline of about
nineteen per cent, and the right that matters costs a quarter of it. Against the
chapter’s own refinancing gap of 5,905,381 at the same moment, that paydown avoids an
equity call more than ten times its own size — and it costs the lender
nothing at origination to grant.
Plus the maturity page, all six lines. Chapter 13 specifies six and prints
four. The four reproduce to the dollar; one sentence does not: in the stressed case loan to
value binds at 5.50 and 6.35 per cent and coverage only from 7.25, not “throughout”.
Revised, with a ninth sheet for the other chapters. The checks compared every
value with a tolerance of 0.5 in absolute terms, so no ratio could fail; they now allow 0.05 per
cent. The balances are computed rather than typed in, so a different loan re-solves. And
chapters 2, 5, 6, 8 and 12 are recomputed: coverage takes over from loan to value at
7.43 per cent, 108 basis points up rather than 165; a 6.50 per cent
loan carrying the same costs is 6.60 per cent all-in, a tie, not
“roughly 6.54”; the lender starts to lose below a 42.8 per
cent fall in value, not fifty; and defeasance at 4.10 per cent costs
40,467,882, not 40,387,556. Sixty-one checks, thirty-four of which exist only to
reproduce the book before questioning it.
Go to sheet 3 and change the amortisation column. Then go to sheet 4 and change the debt
yield covenant. Those two cells are the whole negotiation: between them they set both the value of
the cheap cure and the range of income decline over which it exists at all. Then replace the loan,
the rate and the income on sheet 1 with your own — everything re-solves, including the
closed form.
What the arithmetic does not settle
It cannot tell you what your agreement actually says, and that is the book’s point rather than
a limitation of the file. Whether a deposit is held and returned or applied to principal, whether
consecutive cures are permitted, whether a cure of coverage also cures debt yield, and whether a
cure prevents the trap or merely reverses it — those are five drafting questions and the
workbook assumes the borrower-favourable answer to each. Where your document differs, the numbers
here are the ceiling rather than the outcome.
The same models, for your own loan
Two workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Chapters 2 to 18 · Appendices A and F
A blank cure model, and the loan on one page
The book’s workbook with its inputs emptied. And a new file for the pages the book asks a borrower to produce before signing: the three sizing tests, the binding one and the rate at which coverage would take over; the equity actually required and the cash-on-cash before and after reserves; the all-in cost; the lender’s definition of income and the covenant ladder on both definitions; the deposit and prepayment cures at a 10, 20 and 30 per cent decline, as Appendix A asks; the exit priced three ways; the decline at which the lender starts to lose, and the mezzanine.
The book’s loan is listed in a text file inside the archive. Type it back in and every figure comes back, from the 7.467 per cent constant to the 1.120 times combined coverage, except the defeasance cost the book misprints.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 2 to 19 · Appendices A and B
Thirteen working documents
The sizing worksheet. Rate, amortisation and the four hedging numbers. The one page before a term sheet. The covenant ladder on the lender’s definition, and the one line every borrower should hold. The monthly monitoring page. The cash management agreement in six questions, with the reserve schedule. The cure worksheet with the window. Prepayment and the extension. The maturity page, all six lines. The recourse page and the transfer map. The reporting calendar and the default page. The capital structure and the workout pack. And the forty red flags, with a column for the dollar effect of each.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Eight on sizing, rate and cost, seven on covenants and definitions, seven on cash, reserves and cures, six on the exit and the maturity, six on recourse to the workout, and six on the three cases below. Where the book prints a figure that does not recompute, the question asks for the corrected one and the marking sheet says why. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapters 3, 6 and 7 · Case one
The interest-only period that can be lost
Chapter 3 warns that interest-only may end on a covenant breach. On the interest-only payment the trap fires at a 26.8 per cent decline, beyond the 24.7 at which the amortising loan is in default: at that income the amortising payment is covered 1.021 times, so losing interest-only is not a trap, it is an event of default the same day. And the 1,369,035 the chapter calls the cost is the gap at year three; at maturity it is 1,200,392 or 2,132,797, depending on the schedule that follows.
Chapters 9 and 19 · Case two
The trap that cannot pay for the leasing
The tenant leaves, 322,340 a year is trapped, and the re-letting costs 1,200,000: 3.7 years of trapped cash. The right to spend the trap on leasing is worth what the trap holds on the day the lease is signed, 322,340 here. A replacement needs to bring back only 30.1 per cent of the lost income to clear the trap, and a four-quarter release instead of two holds 509,920 more of a recovered building’s cash for no credit reason. Three figures ADDED: months to sign, months to rent, and the replacement rent.
Chapter 18 · Case three
The mezzanine, and the appreciation it needs
The chapter says the mezzanine is accretive “only through appreciation”. How much: 3.40 per cent a year for five years, the growth at which the equity beneath it earns the mezzanine’s 11 per cent. With value flat it takes the equity IRR from 4.18 to 2.05 per cent. The sponsor pays the coupon from its own pocket from a 10.7 per cent decline in income, before the senior trap at 14.0, and the equity is wiped out at a 32.6 per cent fall in value instead of 42.8. ADDED: the five-year hold and the growth rate.
a figure the book does not give, used in the cases only and marked wherever it appears; the book’s workbook has none
Checks sheet
sixty-one controls in the book’s workbook — thirty-four reproduce the book before anything is questioned, nine test a figure it prints wrongly; every other workbook ends with its own
The building, the loan and the covenants are the book’s own and fictional, as they are in the
book. This is not legal advice, and no workbook substitutes for reading the agreement.
Opening the files
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF prints on A4 or US Letter. They use no
macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks to
update links on opening, decline — there are none.
What changed, and when
23 Sep 2026
The book’s workbook corrected: its checks allowed 0.5 in absolute terms, so no ratio could fail; they now allow 0.05 per cent, and the balances are computed. The bound on the deposit cure is 1,910,586, not 1,911,397. A ninth sheet recomputes chapters 2, 5, 6, 8 and 12: coverage takes over at 7.43 per cent (+108 basis points, not 165); the 6.50 per cent loan is 6.60 per cent all-in, a tie, not 6.54; the 70 per cent loan pays 3,240,604, not 3,240,270; the lender starts to lose below a 42.8 per cent fall, not fifty; defeasance costs 40,467,882 and 37,302,914, not 40,387,556 and 37,204,217; in the stressed maturity case loan to value binds at 5.50 and 6.35 per cent. Sixty-one checks. Added: a blank version, a one-page loan model, thirteen working documents, forty questions that mark themselves and three new cases. The workbook can now also be downloaded on its own.
How much cash cures an LTV covenant breach?Loan less covenant times value: 4,400,000 on a 52,000,000 loan after a 15 per cent fall, or 6,285,714 if the deposit is added to value instead.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
Go beyond the companion files
How to Read a Real Estate Loan Agreement develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
These files accompany How to Read a Real Estate Loan Agreement. The book is on Amazon.
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