Resale, Reversion, and Proceeds

Resale, Reversion, and Proceeds covers the exit side of property investment analysis: when the explicit forecast ends, how value at that date is estimated, and how a gross selling price becomes cash available to the owner.

Begin with the Projection Period when the main question is how long cash flows should be modeled explicitly. Use Reversionary Value for the estimated property value at the end of that forecast and Resale Price when distinguishing the expected or actual gross sale price from other value measures.

Resale Proceeds traces the deductions between gross price and net property or equity cash. After-Tax Proceeds from Resale adds a separate tax-measurement layer. A Revaluation Clause instead concerns a contractual reset of rent or another property-linked payment; it can affect forecast income but is not itself an exit value.

How the Concepts Connect

A property DCF normally forecasts operating cash flow through a stated endpoint, estimates value or price at that endpoint, deducts selling costs, and discounts the resulting net reversion to the valuation date. A levered equity model may then deduct debt payoff. An after-tax model separately estimates relevant tax effects. Keeping these layers distinct prevents property value, sale price, net proceeds, equity proceeds, and after-tax cash from being treated as interchangeable.

What to Verify

• Forecast and sale dates, cash-flow timing, and the first income period after exit.
• Forward NOI, terminal capitalization rate, discount rate, and selling-cost assumptions.
• Whether the analysis is property-level or equity-level and before or after tax.
• Debt payoff, transaction costs, tax basis, and other deductions included in the stated proceeds measure.
• Lease rollover, rent reviews, capital work, market liquidity, and property condition at the assumed exit date.
• Sensitivity to alternate income, cap-rate, discount-rate, cost, and timing assumptions.

These pages are educational and do not provide an appraisal, investment recommendation, accounting conclusion, tax advice, legal opinion, or lending decision.

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