What is downside protection?

Investors often refer to “downside protection” as the degree to which the probability and magnitude of a worst-case scenario has been mitigated.

What is last dollar basis?

We use the term last dollar basis to represent the price at which we would need to sell the asset in order to cover our investors’ principal.

What is stress testing in real estate?

Sometimes referred to as “scenario analysis”, stress testing in real estate underwriting is the practice of examining what exit pricing and return potential would look like in different scenarios. Stress testing is a method of predicting future cash flow (and subsequently return metrics) based on these potential scenarios.