Key Takeaways
- Underwrite each property independently before evaluating the portfolio—disaggregation prevents the averaging problem.
- Cross-collateralization release provisions directly impact your exit strategy; negotiate favorable terms.
- In many portfolios, 20-30% of properties generate 60-70% of returns—identify the drivers and the drags.
- Demand a portfolio discount if the package includes assets you would not acquire individually.
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Test Your Knowledge
1.What is cross-collateralization in portfolio underwriting?
2.When should you demand a portfolio discount?
3.What is a key benefit of portfolio-level underwriting over individual property analysis?