Investment Committee Memo: A CRE Template and an Annotated Example

What an investment committee memo is for

An investment committee memo (IC memo) is the document a commercial real estate deal team sends its investment committee to ask for approval on a deal. It exists so a group of people who were not in the underwriting can make a decision they'll be held to. That's the whole job.

It has two readers at two different times. The first is the committee this week, which needs to approve the deal, decline it, or send it back with questions. The second is whoever opens the file in 2029 to work out why the firm bought the building and what it assumed about rents, exits and tenants when it did.

That second reader is the one most memos forget. If the memo reads like a broker's OM, with the upside case on page 1 and the risks in a paragraph near the end, it has failed before the vote.

The sections, in order

Committee members read the first half page closely and skim the rest until something catches them. Put the decision up front and the proof behind it.

1. Recommendation and ask. First half page. What the asset is, the price, the equity cheque, the debt, the base-case returns, and the recommendation in one sentence. If the committee reads nothing else, this is enough to vote on.
2. Deal summary. How the deal came in, where it stands (LOI, PSA in negotiation, under contract), and what the committee is approving at this stage: a bid, a PSA signing, a hard deposit, or a closing.
3. The asset. Address, size, age, construction, condition, tenancy at a glance. Facts with sources: the OM, the site visit, the property condition report if you have one.
4. The market. Submarket vacancy, rent trend, supply under construction, recent sales, each with its source (a brokerage report by name and date, your own comps, a call with a leasing broker).
5. The business plan. Hold period, what you'll do to the asset, how you'll exit. If the plan is “collect rent and sell”, say so. Core-plus deals often fail committee because the memo dresses them up as something else.
6. Underwriting summary. The assumptions table (below), then a short walk from in-place NOI to year-1 NOI. This is where the committee spends most of its time.
7. Returns and sensitivities. Base case, downside case, and a grid showing how levered IRR moves with the 2 or 3 assumptions that matter most, usually exit cap, rent growth and lease-up timing.
8. Capital structure. Sources and uses. Lender, loan amount, rate, term, amortization, covenants, with the term sheet as the source.
9. Risks and mitigants. A table, with an owner for each mitigant. “Market risk: mitigated by strong fundamentals” is filler. “Tenant B lease expires in year 3: downside case models 9 months of vacancy and $625,000 of TI and LC” is a risk the committee can weigh.
10. Diligence status and open items. What's done, what's outstanding, and which open items block closing.
11. Timeline. Key dates from here to close.
12. Appendix. Rent roll, T12, sales and lease comps, model outputs. The committee rarely reads these in the meeting. The 2029 reader needs them most.

The rule the whole memo rests on

Every material number in the memo traces to a source document, and the memo says which one.

In-place NOI traces to the T12, and the memo says which months and which line items were adjusted. Contract rent traces to the rent roll and the leases behind it. Market rent traces to named lease comps. The exit cap traces to sales comps and to a stated spread over the going-in cap. The debt terms trace to the lender's term sheet, dated.

This does two things. It lets a committee member check any number in under a minute, which is what builds trust in the analyst. And when the T12 is restated or the lender reprices, you know exactly which cells in the memo move.

The assumptions table is where this rule lives. Four columns: assumption, value, source, basis. “Exit cap rate | 6.75% | Sales comps 1 to 4 (appendix D) | 50 bps over going-in, in line with the 3 most recent trades in the submarket.” The fourth column is where you argue; the third is where you prove.

The questions committees ask most

The same handful comes up on nearly every deal. Build the answers into the memo rather than waiting to be asked.

• What's the downside case, and what has to go wrong to get there? Show it as a full case with its own IRR and multiple, with the inputs that differ from base clearly listed.
• Why this exit cap? State the going-in cap, the spread you've assumed, and the comps that support the exit figure. See going-in versus exit cap rate for how to make that argument.
• What did we assume on rents, and why? In-place versus market, with the lease comps that set market.
• What happens if the top tenant leaves? Downtime, TI, leasing commissions, and the effect on debt covenants during the gap.
• Where did the comps come from? Name the deals. If they are from your own files, say that. If they are from a broker's package, say that too, and whether you verified them.
• What did we pass on in this market, and why is this one different? This is the question analysts most often cannot answer, because the firm's record of passed deals lives in old emails. A firm that keeps comps from deals you passed on can answer it in a sentence.

An annotated example: Riverside Logistics Center

A one-page memo for a fictional deal, with a note under each section on what it does and what it cites. The figures are invented and consistent with each other; the arithmetic checks.

Riverside Logistics Center, Nashville, TN. Memo v3, October 2026. Prepared by: [analyst]. For: Investment Committee, [date].

Recommendation and ask

Approve signing the PSA at $31,200,000 ($130 per SF) for a 240,000 SF, two-tenant Class A distribution building in the Southeast Nashville submarket, 100% leased. Equity of $12,792,000 including $312,000 of closing costs. Senior debt of $18,720,000 (60% LTV) at 6.4%, interest only, 5-year term. Base case: 8.5% levered IRR, 1.45x equity multiple, 5-year hold. Going-in cap 6.25% on year-1 NOI of $1,950,000. Recommendation: approve, subject to the open items below.

Note: everything the committee needs to vote is in this paragraph, including a clear ask (sign the PSA). Sources for each figure follow.

Deal summary

Marketed by [broker] in a limited process. We submitted a best-and-final at $31,200,000 against a $32,500,000 guidance price and were awarded the deal on 24 September. PSA under negotiation; 30-day diligence, 15-day close.

Note: how the deal arrived and where it stands. Guidance price from the broker's process letter; our bid from the bid letter, both in the deal record.

The asset

Built 2017, 32-foot clear, 50 dock doors, ESFR sprinklers, 185-foot truck court. Two tenants: Tenant A, a national third-party logistics operator, 150,000 SF at $8.40 per SF NNN, expiring March 2033; Tenant B, a regional building-products distributor, 90,000 SF at $8.80 per SF NNN, expiring December 2029. Both leases carry 3% annual bumps. Site visit completed 18 September; roof and slab appeared sound, PCR ordered.

Note: physical facts from the OM, checked against the site visit. Lease terms from the rent roll and the two lease abstracts; the OM's tenancy summary rounded the rents, so we didn't use it.

The market

Southeast Nashville industrial vacancy 5.8% at Q3 2026 per [brokerage report, dated]. Market rent for comparable 2015-and-later product $9.25 per SF NNN, from 4 lease comps in appendix C, 3 of them from our own deal record. 1.1 million SF under construction in the submarket, 40% pre-leased.

Note: each market figure names its source. The lease comps from our own passed deals carry more weight than the broker's, because we have the full lease terms.

Business plan

Core-plus hold. Collect contract rent through the hold; renew Tenant B in 2029 at or above market; sell in year 5 to a core buyer. No capital program beyond a $24,000 annual reserve ($0.10 per SF).

Note: the plan is simple and the memo says so. Dressing a rent-collection deal up as value-add is how memos lose a committee's trust.

Underwriting summary

Note: this is the table the committee argues with. Column 3 says where the number came from; column 4 says why we think it's right. The Tenant B renewal is labelled as an assumption in column 3, because that's what it is.

Returns and sensitivities

Year-1 NOI $1,950,000 growing to $2,194,742 in year 5. Debt service $1,198,080 per year (interest only). Year-1 DSCR 1.63x; debt yield 10.4%. Cash flow to equity after reserve: $727,920 in year 1 rising to $972,662 in year 5. Exit at 6.75% on forward NOI of $2,260,584 gives a gross sale price of $33,490,000; after 1.5% costs and loan repayment, $14,268,000 to equity. Levered IRR 8.5%, multiple 1.45x. Unlevered IRR 7.3%.

Sensitivity, levered IRR: exit cap 6.25% / 6.75% / 7.25% gives 11.6% / 8.5% / 5.5%. Rent growth at 2% instead of 3% gives 6.1%.

Downside case: Tenant B vacates at expiry, 9 months of downtime, re-lease at $9.25 with $4 per SF TI and 6% leasing commission ($625,000 total). Levered IRR 5.7%, multiple 1.29x. DSCR falls to 1.09x in the vacancy year, below the 1.25x covenant, so the downside includes a period of cash sweep.

Note: the walk from NOI to equity cash flow is shown so a committee member can check it with a calculator. The downside case has its own IRR and says which inputs differ from base. Model outputs in appendix E.

Capital structure

Uses: purchase price $31,200,000, closing costs $312,000; total $31,512,000. Sources: senior loan $18,720,000 (60% LTV, 6.4% fixed, interest only, 5-year term, 1.25x DSCR covenant), equity $12,792,000. Terms per [lender] term sheet dated 29 September 2026, 60-day rate hold.

Note: sources and uses balance, and the loan terms cite a dated term sheet. If the lender reprices, this section and the returns section both move. See debt service.

Risks and mitigants

Note: each risk has a number attached and someone responsible for the mitigant. The rollover row points back to the downside case rather than restating it.

Diligence status and open items

Complete: site visit, rent roll and lease review, T12 review, lease comps. Open: property condition report (due 15 Oct, blocks closing), Phase I environmental (due 20 Oct, blocks closing), estoppels from both tenants (requested, blocks closing), survey (ordered). Lender rate hold expires 28 November.

Note: the committee can see what it's approving on incomplete information, and which items would stop the deal if they came back badly.

Timeline

PSA execution 10 Oct; diligence ends 9 Nov; hard deposit 10 Nov; close 24 Nov 2026.

Appendix

A: rent roll and lease abstracts. B: T12, September 2026, with adjustments noted. C: lease comps. D: sales comps. E: model outputs (annual cash flow, sensitivity grid, downside case).

The template

The downloadable Word template follows the section order above, with three tables built in.

The assumptions table has four columns: assumption, value, source, basis. Fill the source column with the document and page or line (T12, line 14; rent roll, suite 200; term sheet, section 3), so the next reader can go straight to it.

The risks table has five columns: risk, likelihood, effect on returns, mitigant, owner. Make the effect a number where you can.

The open items table has five columns: item, status, owner, due date, and whether it blocks closing.

The header carries a version number and date on every page. A committee member holding v2 while the room discusses v3 is a common and avoidable problem.

Refreshing the memo when a number changes

Numbers change between the first draft and the vote. The lender reprices, the T12 arrives with a restated insurance line, a tenant's estoppel shows a rent that disagrees with the rent roll.

The source column makes the refresh manageable. When the term sheet changes, the capital structure and returns sections move, and nothing else. When a T12 line changes, year-1 NOI moves, which moves the going-in cap, the DSCR, the debt yield and the returns. Rerun the model, update those cells, bump the version number, and note the change at the top: “v3: lender rate revised from 6.25% to 6.4%; levered IRR moves from 8.9% to 8.5%.”

Never edit a number in the memo without changing it in the model first. The memo reports the model.

Altrio keeps the deal record the memo cites: the OM, the rent roll and T12 with the numbers filed into fields, every email from every broker on the deal, and the comps from deals the firm passed on, searchable by market. That is what lets an analyst answer “where did this number come from” and “what else did we see in this submarket” without opening old email. Altrio Enterprise adds the IC dashboard and approvals, so the memo and the committee's decision sit on the same record. The path from the broker's email to the memo is in from offering memorandum to IC memo, and the underwriting that feeds it is in how to underwrite a commercial real estate deal.

Start free and keep your next deal's memo on the same record as its sources.