A Practitioner's Guide to Occupancy Cost, Turnover Rent, Tenant Mix and the Only Asset Class Whose Tenants Report Their Sales
Julian R. Sterling
These are the companion files of Retail Real Estate by Julian R. Sterling.The book on Amazon →
A grocery-anchored shopping centre is offered at €66.0 million on a 7.23 per cent net initial yield.
Retail is the only asset class in which the tenant reports what it sells — and run unit by
unit, 16.2 per cent of that rent roll, €904 826 a year, is rent no occupier of those units can sustain. A retail
rent is not negotiated. It is revealed.
The five Excel workbooks that go with the book, corrected where it was wrong, each model closing on a checks sheet that ends ALL OK. Around them: the same four 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.
Twelve workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 23 September 2026.
Get an email if these files are corrected
Optional. When a workbook on this page is corrected or a new worked case goes up, readers on the list get one email, plus a short note when a new book comes out. The downloads do not need it.
These carry the book’s own figures, so that every number it prints can be traced to a live
formula. Each model workbook now closes on a checks sheet that ends ALL OK.
Download these five196 KB
Chapters 3 and 4
Occupancy cost and rent at risk
The tape, unit by unit: area, rent, service charge, rates, reported sales, occupancy cost ratio, the ceiling for that trade, the sustainable rent and the gap. On the centre in the book it finds 16.2 per cent of the rent roll — €904 826 a year — that no occupier of those units can sustain. Paste your own tape in and the answer takes twenty minutes. New: a fourth sheet wires to the tape what the book leaves in the text — the anchor subsidy, the co-tenancy cascade, the restructuring bands, the sales shocks and the dated multiples. It shows that at the 44 per cent rise in sales Chapter 21 needs, the rent at risk does not vanish: 68,343 a year remains, and every unit is inside its ceiling only at +54.5 per cent.
Rent capacity is a residual: the ceiling times sales, less service charge and rates. This sheet projects it forward by trade and computes the sales growth each one needs merely to stand still — 1.81 per cent a year for a value operator against 0.37 per cent for a jeweller — plus the charge level at which capacity reaches zero.
Every lease, quarter by quarter: expiry, landlord's works, void, incentive and re-letting at the rent the incoming trade can sustain rather than at a comparable rent. Every cell is a formula. It is the model behind the €44.6 million valuation and the 2.93 per cent internal rate of return at the asking price.
The test that finds floorspace with a negative value as retail — on this centre 5 950 m² of it, worth −€1.03 million as shops in steady state — the alternative-use rent at which conversion overtakes it, €48/m² (now solved exactly, 47.82; the first file’s approximation returned 29.84), and a fourth sheet that prices the right-sizing decision properly, by rebuilding the cash flow rather than by adding a perpetuity gain to it. On this centre that is worth €0.70 million.
The eighty questions of Appendix A as a live checklist, in the same order, from the same source file as the chapter. It opens with the sales line, because that is what the leases are worth. The status column marks any question answered without a source as unsourced.
The four model workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Chapters 3 to 18
Your tape, your trades, your leases, your space
Occupancy cost and rent at risk, capacity and the service charge, the ten-year cash flow and the right-sizing decision, with the same formulas and every blue cell emptied. The test steps stay: the horizon, the one-point ceiling shift, the sales shocks. Eighty_Questions already arrives empty.
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: 904,826 of rent at risk, 44.6 million of value, 2.93 per cent at the asking price.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 1 to 24 · Appendix D
Thirteen working documents
Reading a sales report before believing it. The occupancy cost table. Rent at risk, its three rankings and the four dated warnings, with the restructuring bands. Capacity and the service charge. The turnover clause tested before signing. The anchor and co-tenancy. The re-letting cycle and the negative-space test. The three yields and the bridge from the appraisal. The ten-year cash flow and its six omissions. Right-size, convert or sell. What a lender will lend. What would have to be true. And the committee paper with the bid paragraph and the six levers.
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 ratio and rent at risk, seven on capacity, turnover rent and the anchor, six on vacancy, the cycle and the yields, seven on the bridge, the cash flow and the value, six on the owner’s options, debt and the paper, and seven 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.
Chapters 7 and 8 · Case one
Paying the anchor to stay
The book says the centre can afford to pay the anchor to stay and never says how much. Its departure exposes 1,985,894 a year; a 20 per cent rent cut at renewal (ADDED, as a test) pays for itself if it lowers the probability of departure by 5.66 points. A specialty sales fall of only 3.0 per cent makes the departure cost more than the whole subsidy. Priced from the date the anchor can actually leave, the exposure is 9.3 million, not 22.9.
Chapters 16 and 22 · Case two
Re-base early, and buy the term
Fashion multiple B pays 355 against a sustainable 213.20, with six quarters to run. Re-basing now on ten years firm (ADDED) beats waiting for the expiry by 862,685, although it gives up 302,034 of rent; any re-based rent above 160.12 still wins. The second five years firm are worth 491,564 of it. Waiting is better only if an orderly renewal is more than 74 per cent likely.
Chapter 19 · Case three
One vacancy and the covenant
The 33.0 million loan covers its interest 2.52 times, with 551,178 of headroom. 8 of the sixteen units would breach the 2.25 times covenant by going dark on their own (2 with the carve-out Chapter 19 recommends). On the book’s own ten-year flow, trailing cover first breaches in year 3, and the trough needs an equity cure of 11.1 million, not the 1.5 million of the steady-state comparison.
Blue on pale blue is an input you may edit. A yellow fill is the carrying assumption of
the sheet — the one to argue about first. Black is a formula. Nothing is locked,
protected or watermarked. There are no macros and no external links.
Each model workbook ends with a sheet called Checks: the figure as the book prints it,
the figure the workbook computes, the variance and a status, and it ends ALL OK when every line is reproduced. Where the book was wrong, the line carries the corrected figure and says so; a figure the book does not give, used in the cases, is marked ADDED wherever it appears. The PDF prints on A4 or US Letter. If a line ever reads
“to check”, the workbook and the book have drifted apart — and the workbook is
right.
Three numbers to compute on your own centre
The occupancy cost ratio of every unit, then the rent at risk. Here, 16.2 per cent of
the rent roll.
The sales growth each trade needs merely to hold its rent capacity flat. Where
it exceeds what the trade can achieve, that rent is falling whatever the lease says.
The net income of your worst floorspace after one full cycle. If it is
negative, that space is subtracting — and the rent roll will not tell you.
What changed, and when
23 Sep 2026
The five workbooks given checks sheets that end ALL OK, and a new sheet wiring the anchor, co-tenancy, restructuring and shock arithmetic to the tape. Corrected: at the 44 per cent rise in sales of Chapter 21 the rent at risk does not vanish (68,343 remains; +54.5 per cent is needed); the “10.2 times” of Chapters 8 and 16 is at the appraisal’s 7.25 per cent, and at the 8.25 per cent exit yield the dated multiple is 8.7; the conversion tie rent is solved exactly (47.82, where the file returned 29.84). Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
How do you calculate Zone A rent on a shop?Halve back in 6.1 m zones to get area ITZA, then divide rent by it. A 95,000 comparable gives 1,454 Zone A and a 121,013 rent on the deeper subject shop.
How is turnover rent calculated on a retail lease?The higher of base rent and a share of sales: 8 per cent of 2,300,000 on a 150,000 base gives a 34,000 top-up, worth 284,000 on a three-year average at 10 per cent.
How do you value a shopping centre?Capitalise the rent tenants' sales can sustain, add the over-rent only for its unexpired term: 52.8 million here, not 60.1 million on passing rent.
How much does a retailer's CVA cost the landlord?A 40 per cent CVA rent cut costs 221,898 of present value on a 120,000 lease, but taking the shop back costs 355,507. Counter at the 90,000 the sales support.
How do online sales affect turnover rent?It depends on the turnover clause: with click-and-collect in and online returns out, a store pays a 24,000 top-up; on the old wording it pays none, for five years.
When is converting vacant retail space worth it?When the new use is worth more than the unit through a full re-letting cycle. Let at 60/m2 it nets -8.43/m2 a year, so an alternative rent of 33.84/m2 is enough.
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 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.
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.
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.
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. The number that mattered appears in no report at all.
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.
Go beyond the companion files
Retail Real Estate develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
If this book helped — or didn’t — a few lines on Amazon are worth more than they look: they are what the next reader goes on. Write a review. The workbook stays free either way.