Buildings, Occupiers, Leases and the Arithmetic of an Institutional Asset Class
Julian R. Sterling
These are the companion files of Logistics and Industrial Real Estate by Julian R. Sterling.The book on Amazon →
The five Excel workbooks that go with the book. The first four carry the appendices: rent per square meter,
per cubic meter and net effective three ways; valuation and the ageing asset; development and the letting decision; the
specification checklist and the sixty questions. The fifth, new, carries every worked example of the eighteen chapters,
checked line by line against the book, and corrects the 15 figures that were wrong. Around them: the same models with the
inputs emptied, thirteen working documents to print, forty questions that mark themselves, and three cases the book names
and never takes to a number. Every number is a live formula. Nothing is locked, protected or watermarked.
Free to download. No sign-up, no email address, nothing to fill in.
Thirteen workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 24 September 2026.
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Appendix D · Cases 1 and 2
Rent, cube and net effective
An occupier stores goods in a volume and pays rent on a plan, and every disagreement about what a
tall building is worth comes from that mismatch. Two buildings of identical footprint, one at 8.0
metres of clear height and one at 12.5: an agent quotes the taller at 132 per square meter on a
cube-parity basis. Deduct what the occupier must spend on racking and handling to use the height,
split the surplus by negotiation rather than by arithmetic, and the defensible band is 88 to 103.
132 is not in it — and none of the analysis needs a single comparable. Then net effective rent
done three ways on one lease: 80.58, 75.05 and 86.94 per square meter. Only the third is evidence of
market rent, and reaching it means splitting a landlord’s contribution between what permanently
improves the building and what bought nothing but a headline. Further sheets price a fixed uplift
against its own average and show what a cap on an indexed lease surrenders, year by year.
A single unit and a fourteen-unit estate produce the same 1,400,000 of gross rent. Priced to the
same net yield they are worth 25.3 million and 20.5 million, and the 128 basis points between their
headline yields is not a risk premium — it is the arithmetic of converting gross rent into net
income, worked line by line rather than by a rule of thumb, which is always kinder than a schedule.
Then a 22-year-old unit marketed at a 6.25 per cent yield: 24.2 million on the marketing figure and
18.5 million once the capital cycle and the re-letting are priced. Nothing about the building changes
between those two numbers. Buying at the honest figure is buying at 8.71 per cent, not 6.25. A land
check closes the sheet: cleared, the site is worth 4.36 million, so the building accounts for 544 per
square meter — and the pricing question answers itself.
Establish the carry first: on the book’s scheme, 142,500 a month, of which more than
two-thirds is finance rather than building. Everything else is arithmetic around it. Four letting
outcomes, weighted, give an expected profit of 6.0 per cent on cost — a fee rather than a
development margin, earned for carrying two years of letting risk against a downside that loses
6,575,000. The same numbers say the land supports 2.76 million, not the 4.70 million being paid; the
difference is the price of the letting risk, and a separate residual sheet shows what the identical
scheme is worth with a pre-let in hand. And then the two dates: the scheme breaks even if it lets
within 29.2 months of completion and earns fifteen per cent only if it lets within 8.3. Any developer
describing that as low risk is describing the first date and pricing the second. Revised: the lost rent
on the carry sheet was typed into its formula; it now reads the letting sheet.
The specification checklist — 54 items across ten sections, with a column for the
measurement, a column for where the figure came from, and a verdict. It enforces the book’s two
habits: write down the measurement rather than the adjective, and record the source, because a number
taken from a brochure and a number taken with a laser have different standing and you will not
remember which was which. The thresholds sheet is the one to read before the visit: eight dimensions
that behave as cliffs rather than as slopes, each with a cell for this building and a pass or fail
— and a count of the ones not yet established, because a threshold that is not established is
not a threshold that is passed. Then sixty questions to ask before underwriting, each with the
book’s own note on what a weak answer sounds like.
The book says every figure it prints is reproduced by a live formula; the first four workbooks carried
the appendices only. This one carries the chapters, one sheet each, from what low capital intensity is worth
in Chapter 1 to selling a year either side of a break in Chapter 18. Its checks sheet sets 466 figures
beside the book’s: 444 reproduce, 7 differ only by an intermediate the book rounded, and
15 are corrected. Four of them change a conclusion. Chapter 16 charges a solar roof lease with the whole
roof recovering, which is due in year twelve with or without the panels: the contract is worth
1,642,567, not 887,748. Chapter 18 deducts the renewal’s rent-free twice: waiting past the break is
worth 1,586,047 more in expectation, not 816,013. In Chapter 4, moving the barrier weight from 30 to 15
does not change the investor’s answer: Ashford Point still leads by 60. And Chapter 12’s contingency
covered all of the ground and supply overrun, not most of it.
The four computing workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Appendices C and D · Chapters 1 to 18
Your building, your lease, your scheme
Rent and net effective rent, the net-to-gross and the ageing asset, the carry and the letting decision, and the eighteen chapter sheets, with the same formulas and every input emptied. The steps stay: the landlord’s share of the surplus, the void lengths, the yields tested. The specification workbook already arrives empty, so it has no blank twin.
The book’s inputs are listed in a text file inside the archive. Type them back in and the book’s figures come back with them: 142,500 of carry a month, 18,508,808 for the ageing unit, 4,181,332 of residual land value.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 1 to 18 · Appendices A and D
Thirteen working documents
The dimensions that decide lettability, to read before the visit and fill in on site, and the specification checklist in two parts with a column for the source of every figure. The location scored twice, for the occupier and for the investor, with the barrier test. The occupier’s total cost of occupation in rent equivalents. Fit-out, stickiness and the renewal range. A lease abstract that records what each clause does to the income. Net effective rent both ways, to the break. The residual with its sensitivity and a graded pipeline. The cost plan and the delay. Speculative or pre-let, with the carry and the two dates. Obsolescence sorted into curable and incurable, with the land check. And the exit: the buyer, the file, the lease event.
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
Seven on the box, the site and the network, seven on occupiers and formats, seven on the lease and the income, seven on land, cost, letting risk and yields, six on obsolescence, energy, portfolio and exit, and six on the three cases below. 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.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
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.
Chapter 13 · Case one
Terms that move with the void
Chapter 13 calls a constant rent-free across every void band “the most common error in speculative appraisals”, then holds fifteen months free in every row of its own table. Let each six months of void add three months of rent-free and each year a quarter-point of yield (ADDED), and the expected profit falls from 3,582,984 to 1,601,102; the pre-let earns 3,892,633. Parity with the pre-let comes at 3.2 months, not 6.9. With the yield held, the confident case survives only if a six-month void costs less than 3.5 extra months free.
Chapters 5 and 6 · Case two
Where incumbency inverts
Chapter 5 calls the crossover, the point at which an obsolete building costs the occupier more than moving, “the single most useful piece of asset management intelligence you can hold”, and never locates it. On Chapter 6’s two occupiers and a penalty of half a per cent of non-rent cost per year of specification gap (ADDED), the conventional occupier leaves once the building is 1.2 years behind, the automated one only at 15.0. The chapter’s ten per cent renewal premium spends a year of that. The automated occupier leaves inside a ten-year lease only if the penalty exceeds 0.75 per cent a year.
Chapter 16 · Case three
Recover the roof first?
Chapter 16 names three remedies for a twenty-five-year roof lease on a twelve-year roof and prices none. Charged only with what it causes, the contract is worth 1,642,567. Recovering first is the worst answer: it brings the whole roof cycle forward twelve years, 1,088,123 of time value, to avoid a strip-and-refit worth 222,006, and leaves 776,450. Handing the strip-and-refit to the operator changes who bears it, not its price; a twelve-year contract is worth 1,270,830. Recovering first pays only on a roof with less than 3.4 years left (with a thirty-year new roof, ADDED).
the last sheet of every computing workbook: each line states its own verdict, and the file ends ALL OK
corrected
a line where the book is wrong: the checks sheet gives the figure it should print
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
Income is taken annually in arrears throughout, which slightly understates value against
quarterly-in-advance receipt and is the conservative choice.
On the checks sheets
115 figures are checked against the book across the first three workbooks, and all 115 reproduce.
The fifth workbook checks 466 more, from the chapters: 444 reproduce, 7 differ only by an intermediate
the book rounded and carried, and 15 are corrected, each with the figure the book should print.
Each line carries its own tolerance, set to the precision the book actually prints: a percentage
printed to one decimal is checked to five hundredths of a point, an annuity factor printed to four
decimals to six hundred-thousandths, money to a unit. That is stricter than a single blanket band, and
it is the honest way round — a check whose tolerance is loose enough for its worst line is not
checking its best ones. Where the book has compounded two rounded factors through a long chain, the
variance column shows the actual difference rather than hiding it.
Go beyond the companion files
Logistics and Industrial Real Estate develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
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.
The book these files come from
Logistics and Industrial Real Estate by Julian R. Sterling. The workbooks reproduce the worked examples in the
chapters; the book is where the reasoning behind them is set out.
What changed, and when
24 Sep 2026
A fifth workbook, the eighteen chapters worked with 466 checks against the book. Corrected: the Chapter 16 roof lease is worth 1,642,567, not 887,748; waiting past the Chapter 18 break is worth 1,586,047 in expectation, not 816,013; the Chapter 4 reweighting leaves Ashford Point ahead by 60; the Chapter 12 contingency covered all of the ground and supply overrun. The carry sheet no longer types its rent into a formula. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
How many pallet positions fit in a warehouse?Build it from the racking module: a 20,000 m² warehouse at 12.0 m clear holds 32,604 wide-aisle positions, 1.63 per m², or 42,146 in very narrow aisle.
How long can a speculative warehouse stay unlet?Profit at completion over the monthly carry: 3.74M over 159,167 gives 23.5 months unlet before the profit is gone, but a 15 per cent margin survives only 1.6.
How many dock doors does a warehouse need?Trucks a day times hours at the door, grossed up for the peak, over the usable window: 26 doors, 0.87 per 1,000 m², for 4,400 pallets a day.
How much more rent is a last-mile warehouse worth?As much as the van routes it saves: 12,000 parcels a day from 8 km instead of 30 km saves 1,009,980 a year, 101.00 per m² of rent on a 10,000 m² unit.
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.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
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.
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.
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.
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.
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