This is the single best demonstration of the platform without describing the platform. Every file that comes across our desk gets run against every test its asset class and deal type carry, not just the one the sponsor came in expecting, and the most restrictive one governs.
LTV and LTC bound leverage against value and cost. DSCR and debt yield test whether in-place income actually supports that leverage. Sell-out and release govern for-sale development, where the collateral is units, not cash flow. Global DSCR, MADS and days cash apply to going-concern and non-profit borrowers, where the operating business, not the real estate, is what a lender is actually underwriting.
"The sponsor almost always names the test they expect to govern. It’s our job to find the one that actually will, before the lender does."
A sponsor who knows which test is going to bind before they go to market can actually do something about it, document NOI, size the pre-sale number, build the operating cash-flow case, rather than finding out from a term sheet that came back short. That’s the whole value of underwriting before placement, made visible.