Capstone: revenue

A building earns like a portfolio of promises, each on its own paper. This chapter writes Harbor Point's rent roll — five revenue claims and two deductions — almost entirely in the pack's vocabulary, because these are the standard leases chapter 19 said contracts exist for. Watch two things as it assembles: how each contract's terms carry exactly the numbers a leasing brief would state, and how the storylines stay separate — the reviewer who cares about the retail deal reads the retail contracts and nothing else.

The anchor lease

// The anchor office lease: 1.86M/yr, ramping to full over twelve months.
contract cre.lease {
  term 2027-07..2030-12
  terms {
    base_rent = 155000
    lease_up_months = 12
  }
}

The pack's lease lowers to a rent stream over the term with chapter 9's ramp built in — lease_up_months is the clamp idiom, as a term. Twelve months from a July 2027 start puts stabilization at mid-2028, which is why the skeleton's phases drew the lease-up phase where they did: phases and terms telling the same story is not a coincidence to admire but a consistency to maintain.

The retail suite, at unit grain

Chapter 16's entity-grain decision said retail behaves differently, so it gets the lease-by-lease contract with the full institutional term sheet:

// The retail suite: escalating, three months free, TI/LC on day one,
// expense recoveries above a stop at the tenant's pro-rata share.
contract cre.lease_unit.retail {
  term 2027-10..2030-12
  terms {
    rent_year = 480000
    escalation = 0.03
    free_rent_months = 3
    ti_total = 250000
    lc_total = 90000
    opex_year = 950000
    opex_escalation = 0.03
    expense_stop_year = 950000
    pro_rata_share = 0.2
  }
}

One contract, four streams in the lowering — and each is a lesson from earlier in the course arriving as a term. Base rent escalates 3% on lease anniversaries (the stepped claim from chapter 9, not the smooth one). Abatement books the three free months as their own deduction line rather than netting them invisibly into rent — gross potential revenue and the incentive both stay visible, which is how an institutional pro forma reports and how a reviewer audits a concession. Recoveries reimburse opex above the stop at the tenant's 20% share — zero in the base year by construction (the stop equals year-one opex), growing as opex escalates past it; a term sheet's most fiddly clause, five terms. TI/LC lands as capital on day one. The .retail suffix names this lease's streams (cre.unit.base_rent.retail), so a second suite later is another contract, not a renaming exercise.

Overage, other income, and the deductions

// Overage rent on the retailer's sales above the natural breakpoint.
contract cre.percentage_rent.retail {
  term 2028-01..2030-12
  terms {
    sales_year = 6000000
    breakpoint_year = 4800000
    overage_pct = 0.06
    sales_growth = 0.03
  }
}

// Parking and signage.
contract cre.ops_revenue {
  term 2027-07..2030-12
  terms {
    amount = 18000
  }
}

// Property operating costs, escalating.
contract cre.property_opex {
  term 2027-07..2030-12
  terms {
    opex_year = 950000
    escalation = 0.03
  }
}

// A stabilized-vacancy allowance once operating.
contract cre.vacancy_loss {
  term 2028-07..2030-12
  terms {
    rate = 0.05
    potential_gross_year = 2560000
  }
}

Percentage rent is chapter 9's guarded kicker as a contract — 6% of sales above the breakpoint, the guard inside the pack's max(0, …). The vacancy allowance runs only from stabilization: during lease-up, vacancy is in the ramp — an allowance on top would double-count the same emptiness, which is precisely the kind of claim-overlap a reviewer reading storyline-by-storyline catches and a formula auditor does not.

What the numbers say

Run the checkpoint. The office lease totals 5,657,500 — check the shape, not just the sum: half-rent months climbing the ramp, then level. Retail base rent runs 1.6 million with the abatement's −120,000 beside it (three months × 40,000, the anchor to verify by hand this chapter). Recoveries are small and start at zero — if that zero surprised you, reread the stop; the term sheet's economics are working exactly as written. And the model's total is still −13.3 million, because a rent roll is not a deal: nothing has funded the 17.4 million yet. NOI now exists, though — the pack derives it from these categorized streams — and NOI is what both of the next two chapters price.

What can go wrong

Terms that drift from the phases. The lease starts at 2027-07 and the lease-up phase ends at 2028-06 — today those agree with lease_up_months = 12. Change one without the others and the model still compiles; only a reader notices the deal disagreeing with itself. Keep the story in one place (the phases) and derive where you can.

A vacancy allowance during lease-up. The double-count described above — the single most common CRE pro forma error, and in this model it is impossible to make silently because the vacancy contract's term states where it applies.

A blended retail claim. The alternative to lease_unit.retail was folding retail into the anchor's rent. Chapter 16's test said no — different behavior, different grain — and the free-rent negotiation that produced the abatement line is the evidence: you could not have stated it inside a blend.

Exercises

Then, on your own:

1. Add a second retail suite — cre.lease_unit.kiosk, 120,000 a year, starting 2028-01, one free month, no recoveries — and confirm the suffix keeps its streams separate in the results. One more lease is one more contract: that is unit grain paying rent.
2. The retailer's broker calls: sales are tracking 5.4 million, not 6. Change one term, rerun, and find every number that moved. The blast radius of a term is the pack's category discipline made visible.