Property fundamentals
Pro Forma
A projection of a property's future operating performance, as opposed to the seller's trailing actuals.
Why Pro Forma matters
Brokers always pitch pro-forma cap rates built on optimistic rent bumps and thin expense assumptions. Use pro forma for triage; for the actual offer, recompute with trailing actuals plus your own conservative growth assumptions.
How to check Pro Forma before you rely on it
Put the seller's pro forma next to the trailing twelve months of actual income and expenses, and mark every line that differs. Rent above the current lease, vacancy below the actual history, and missing lines for management, maintenance, or capital reserves are the usual gaps. Underwrite the offer on the actuals plus your own conservative assumptions, and use the pro forma only to understand what the seller is hoping for.
Related terms
NOI (Net Operating Income)
Gross annual rent minus all operating expenses, before debt service and income tax.
Cap Rate
Net Operating Income ÷ property value. The unleveraged return a property generates, independent of f…
Rent Growth %
Editable annual rent-change assumption used in the 10-year projection; it is not a forecast or permi…
Expense Growth %
Editable annual operating-expense change assumption used in the projection.
Ready to run the Pro Forma math on a real deal?
Free 60-second analysis with labeled starting assumptions and no signup. Pro calculates your Offer Ceiling: the highest price that still meets your targets under the assumptions shown.
Where Pro Forma shows up in TrueCap
Property fundamentals are the facts you enter or confirm about the building itself — price, units, bedrooms, square footage — and the analyzer keeps them separate from assumptions. They decide which benchmarks apply (a 3-bedroom rent benchmark, for example) and appear at the top of every results view and memo so the reader knows exactly what was analyzed.