How it works
Write the cash list first. Then decide what the page is measuring.
- Write the lease type: gross, modified, or net.
- Add extras the tenant still pays.
- Place free rent and TI in the real months.
- Align start dates or name the gap.
- Then discount both stacks at one rate.
Formula in words. Normalized year cash = rent + tenant extras − credits, on one shared calendar.
| Input | Meaning |
|---|---|
| Lease type | Gross, modified, or net |
| Extras | CAM, tax, insurance if tenant-paid |
| Credits | Free rent and TI |
| Dates | Start, end, and free months |
| Rate | One visible discount rate |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$40,000
Lease B start rent$37,200
Discount rate8%
Sample NPV A$382,494
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $40,000 | $37,200 |
| Year-1 extras | $12,500 | $13,375 |
| Year-1 credit | $15,000 | $8,250 |
| Sample NPV | $382,494 | $374,209 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $40,000 | $12,500 | $15,000 | $37,500 | $34,722 |
| Year 2 | $41,200 | $12,875 | $0 | $54,075 | $46,361 |
| Year 3 | $42,436 | $13,261 | $0 | $55,697 | $44,214 |
| Year 4 | $43,709 | $13,659 | $0 | $57,368 | $42,167 |
| Year 5 | $45,020 | $14,069 | $0 | $59,089 | $40,215 |
| Year 6 | $46,371 | $14,491 | $0 | $60,862 | $38,353 |
| Year 7 | $47,762 | $14,926 | $0 | $62,688 | $36,578 |
| Year 8 | $49,195 | $15,374 | $0 | $64,569 | $34,885 |
| Year 9 | $50,671 | $15,835 | $0 | $66,506 | $33,270 |
| Year 10 | $52,191 | $16,310 | $0 | $68,501 | $31,729 |
| Sample NPV | — | — | — | — | $382,494 |
How to read the sample
Sample NPV for Normalize sample is about $382,494. A second path lands near $374,209. That gap is a talking point, not a promise.
Year notes for Normalize sample
- Year 1 of Normalize sample has rent of $40,000.
- Shared building cost is $12,500.
- A credit of $15,000 lowers the cash you pay that year.
- Cash out this year is about $37,500. This net path carries heavy extras in year one.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $34,722 today.
- Next, year 2 rent is $41,200.
- CAM, which is a shared building cost, is $12,875.
- There is no credit in this year.
- You pay about $54,075 this year after extras and credits. The step hits after the credit is gone.
- Time shrinks later cash. At 8 percent, year 2 is worth about $46,361 today.
- Then year 3 rent is $42,436.
- Extras for the building come to $13,261.
- Credits skip this year.
- The net cash this year is about $55,697. Extras keep pace with the building.
- Waiting has a price. At 8 percent, year 3 is worth about $44,214 today.
- After that, year 4 rent is $43,709.
- The shared building cost this time is $13,659.
- No extra credit shows up this year.
- Cash out this year is about $57,368. Later years still sit on the shared calendar.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $42,167 today.
- In year 5 of Normalize sample, rent is $45,020.
- Shared building cost is $14,069.
- There is no credit in this year.
- You pay about $59,089 this year after extras and credits. A missed extra here would fake a win.
- Time shrinks later cash. At 8 percent, year 5 is worth about $40,215 today.
- Year 6 of Normalize sample has rent of $46,371.
- CAM, which is a shared building cost, is $14,491.
- Credits skip this year.
- The net cash this year is about $60,862. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $38,353 today.
- Next, year 7 rent is $47,762.
- Extras for the building come to $14,926.
- No extra credit shows up this year.
- Cash out this year is about $62,688. The row still belongs in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 7 is worth about $36,578 today.
- Then year 8 rent is $49,195.
- The shared building cost this time is $15,374.
- There is no credit in this year.
- You pay about $64,569 this year after extras and credits. Keep this later year in the sum for the long path.
- Time shrinks later cash. At 8 percent, year 8 is worth about $34,885 today.
- After that, year 9 rent is $50,671.
- Shared building cost is $15,835.
- Credits skip this year.
- The net cash this year is about $66,506. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $33,270 today.
- In year 10 of Normalize sample, rent is $52,191.
- CAM, which is a shared building cost, is $16,310.
- No extra credit shows up this year.
- Cash out this year is about $68,501. Keep this later year in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 10 is worth about $31,729 today.
Add those year values. The sample NPV for Normalize sample is about $382,494. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.