Project Type · Refinance & Recapitalization
Refinance & Recapitalization Analysis
Refinancing tests an asset's current performance against current capital markets. Recapitalization reconsiders who owns the risk. Both begin with an honest view of NOI.
Scope
What this analysis is for
Assets financed when rates were lower and values higher face a different refinance calculus. Proceeds may fall short of the existing balance, coverage may constrain sizing, and owners may need to choose between paying down debt, bringing in new equity or restructuring.
Wert-Berater prepares independent refinance and recapitalization analysis for owners, lenders and investors: current performance documented, debt capacity sized under realistic terms and alternatives compared on the same assumptions.
Analytical framework
Refinance analysis
- 01
Current debt
Balance, rate, maturity, prepayment terms and covenants.
- 02
Current value and NOI
Normalized trailing NOI and value indicators.
- 03
DSCR and loan proceeds
Debt sizing under coverage and leverage constraints.
- 04
Interest rate and debt service
Debt service at current and stressed rates.
- 05
Equity and refinance costs
Equity required or released, plus transaction costs.
- 06
Cash-out
Proceeds available above existing debt and costs, if any.
- 07
Hold versus refinance
Comparison of continuing existing debt, refinancing and alternative structures.
- 08
Return implications
Effect of each alternative on equity returns and risk.
Evidence
Sizing constraints
Each line is tested against independent market and operating evidence, not accepted from the sponsor or seller model.
| Variable | What we test |
|---|---|
| DSCR constraint | Maximum loan supported by NOI at the lender's coverage requirement. |
| Leverage constraint | Maximum loan supported by value at the lender's leverage limit. |
| Debt yield | NOI as a percentage of loan amount. |
| Funding gap | Existing balance and costs less supportable proceeds. |
Capital structure
Recapitalization alternatives
When refinance proceeds fall short, or when partners need liquidity, recapitalization reconsiders the capital stack. We compare alternatives on consistent assumptions so owners, lenders and new capital can see how each shifts risk and return.
- Preferred equity or mezzanine to bridge a funding gap
- Joint venture recapitalization with a new equity partner
- Partial sale or buyout of existing partners
- Continuation vehicle or extended hold
- Loan modification or extension compared with refinancing
Application
Who uses the analysis
Owners
Refinance, recapitalize, sell or hold decisions.
Lenders
Independent support for refinance sizing and extension requests.
New equity
Diligence on recapitalization opportunities.
Funds
Continuation and liquidity decisions.
Work product
What you receive
- Refinance sizing analysis
- Recapitalization alternatives comparison
- Hold versus refinance analysis
- Return implications by alternative
Scope boundary. Wert-Berater does not arrange or broker financing. Our analysis supports the decisions of owners, lenders and investors.
Analytical continuity
After the Investment: Independent Performance Monitoring
After refinancing, watchlist and coverage monitoring track whether NOI continues to support the new debt, with early indication of covenant or maturity risk.
The analytical relationship does not have to end when the feasibility study is delivered. Wert-Berater can continue monitoring the asset against the original underwriting assumptions, updating market conditions, testing coverage, identifying performance variances and maintaining a recurring analytical record.
-
Individual Asset Monitoring
- Revenue
- Expenses
- NOI
- DSCR
- Occupancy
- Market rents
- Competitive supply
- Value
- Original underwriting assumptions
-
Watchlist Monitoring
Most relevant here- DSCR deterioration
- NOI deterioration
- Occupancy
- Revenue
- Expenses
- Market conditions
- Collateral / value
- Stabilization
- Refinancing risk
-
Construction Monitoring
- Progress
- Budget
- Cost-to-complete
- Schedule
- Change orders
- Draws
- Remaining costs
- Lease-up
- Stabilization
-
Portfolio Monitoring
- Portfolio performance
- Risk
- Concentration
- Market exposure
- Annual review
- Re-underwriting
- Watchlist
- Portfolio-level trends
Related analysis
Continue through the lifecycle
Discuss the analysis before you commit to it.
A briefing is a working conversation about the decision, the evidence available and the scope that would answer it. There is no obligation, and nothing is subscribed.