1031.Exchange INTELLIGENCE NETWORK
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REAL ESTATE UNDERWRITING

Pro forma

Also called: projected operating statement · forecast NOI

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PLAIN-ENGLISH DEFINITION

A forecast of future property income, expenses and operating performance.

What it means in practice.

A pro forma is an assumption set, not historical fact. Strong underwriting compares it with the T-12, leases, market rents and capital needs.

Why it matters.

Tax urgency should not cause investors to accept optimistic projections without diligence.

Additional notes.

A pro forma is an assumption set, not historical fact. Strong underwriting compares it with the T-12, leases, market rents and capital needs.

CONNECTED LANGUAGE

Related definitions.

Real Estate UnderwritingT-12A trailing twelve-month operating statement showing recent property income and expenses.Real Estate UnderwritingNOINet operating income: property revenue less ordinary operating expenses before debt service and certain non-operating items.Transaction & ClosingDue diligenceThe investigation of a property, transaction and counterparties before closing.
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