Four-tenant neighborhood retail center

Multi-Tenant NNN Refinance Funding Example

Review leases → underwrite NOI → refinance

Refinance a 12,000-square-foot retail center occupied by four tenants. The starting rent roll totals $304,000 of annual base rent. Reimbursements offset eligible property costs, while vacancy, management, unrecovered expenses and capital/leasing reserves remain visible.

By Jaken Finance Group · November 7, 2026

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Property illustration: four-tenant neighborhood retail center — Property illustration for this funding example.

How this funding example works

The starting calculation follows the assumptions described above. Change inputs in the calculator to explore your own numbers. All rates, leverage, rents, cap rates and fees are planning assumptions; they do not establish an offer, appraisal or loan eligibility.

Start with the leases, not the NNN label

The four starting leases represent separate rent obligations, not one guaranteed stream. Review the actual lease, amendments, estoppel, arrears and expiration schedule for each tenant. Contractual rent, collectability and the tenant’s responsibility for expenses are separate questions. The inputs are annual dollars per rentable square foot, not monthly rent per foot.

The example applies the vacancy allowance to both base rent and scheduled reimbursements, while retaining the full reimbursable expense budget. That exposes the landlord’s share of costs when space is vacant or a tenant does not reimburse as expected. Do not add reimbursements to income without also including the corresponding expenses.

Make the example your own

Edit the deal. See the cash change.

Change any assumption to update the loan sizing, cash requirement and exit. Starting values are planning assumptions; actual terms require property and borrower review.

Four-tenant annual base rent roll

Tenant 1 area (square feet)

Tenant 1 annual base rent per square foot ($)

Tenant 2 area (square feet)

Tenant 2 annual base rent per square foot ($)

Tenant 3 area (square feet)

Tenant 3 annual base rent per square foot ($)

Tenant 4 area (square feet)

Tenant 4 annual base rent per square foot ($)

Annual NNN cash flow and reserves

Vacancy / credit loss on rent and recoveries (%)

Scheduled tenant reimbursements ($)

Full property expenses subject to reimbursement ($)

Management on collected base rent (%)

Unrecovered owner operating expenses ($)

Annual replacement reserve ($)

Annual tenant improvement reserve ($)

Annual leasing commission reserve ($)

Income-based valuation cap rate (%)

Existing debt and refinance timeline

Existing principal payoff ($)

Existing loan prepayment charge (%)

Months until refinance closing

Existing monthly debt payment ($)

Permanent financing and closing costs

Assumed permanent loan-to-value ceiling (%)

Permanent annual interest rate (%)

Amortization (years)

Minimum NOI debt-service coverage assumed

New loan origination fee (%)

Other refinance / purchase closing costs ($)

Nonrefundable third-party, legal, title, recording and applicable transaction taxes. Exclude origination and refundable escrow funding.

Initial escrow / lender reserve funding at closing ($)

Cash withheld at closing, treated as a retained asset rather than a project expense. Do not also include it in fees or the separate liquidity reserve.

Starting example shown below. Inputs update automatically when JavaScript is available.

Modeled refinance loan: $2,344,306
Net cash at refinance / cash needed if negative: $589,420
Monthly owner cash flow after reserves: $4,142
Underwritten DSCR: 1.25×

Annual rent roll
Total rentable square feet	12,000
Tenant 1: base rent	$112,000
Tenant 2: base rent	$72,000
Tenant 3: base rent	$65,000
Tenant 4: base rent	$55,000
Scheduled base rent	$304,000
Vacancy / credit loss on base rent	$15,200
Collected tenant reimbursements after vacancy	$68,400

Annual NNN operating pro forma
Collected base rent	$288,800
Collected reimbursements	$68,400
Full reimbursable property expenses	$72,000
Management on collected base rent	$8,664
Unrecovered owner operating expenses	$6,000
NOI before financing and capital reserves	$270,536
Replacement reserve	$6,000
Tenant improvement reserve	$10,000
Leasing commission reserve	$6,000
Cash flow used for debt coverage	$248,536
Annual new debt service	$198,829
Annual owner cash flow after reserves	$49,707

Refinance and closing-period cash flow
Income-based value assumption	$3,864,800
Value-based loan ceiling	$2,705,360
DSCR-based loan ceiling	$2,344,306
Existing loan payoff	$1,650,000
Existing loan prepayment charge	$33,000
New loan origination fee	$46,886
Other refinance closing costs	$15,000
Initial escrow / lender reserve funding	$10,000
Net cash at refinance / cash needed if negative	$589,420
Months to refinance closing	2
Existing debt payments during closing period	$24,000
Property cash flow during closing period, after reserves and existing debt	$17,423

Results round to whole dollars; calculations retain unrounded amounts. Retained liquidity is not a spent project cost. Initial escrow funding reduces cash available at closing and remains an asset, separate from fees. Negative cash remaining in the deal means refinance proceeds exceed cash spent; those proceeds are borrowed money. Income taxes, tax benefits and ownership distributions are excluded. The entered amortization is separate from loan maturity and the fixed-rate period.

Keep owner responsibilities in the pro forma

Management and unrecovered operating costs reduce NOI. Replacement, tenant improvement and leasing commission reserves are shown below NOI, then deducted for the example’s coverage test. A NNN structure does not automatically eliminate roof, structure, downtime, renewal concessions or leasing costs; the actual lease defines those obligations.

Value is operating NOI divided by the entered cap rate. Permanent debt is constrained by both that value and income after the listed reserves. This example uses an amortizing payment even though some actual structures may have different amortization, maturity or interest-only features.

Separate the refinance closing from ongoing operations

The refinance uses the lower of the entered value-based ceiling and the coverage-based ceiling. Origination is calculated on the new loan, then other closing costs and any old-loan prepayment charge are deducted. A negative closing result is a cash requirement. Released equity is borrowed money, not project profit.

The existing loan’s prepayment charge is based on the entered principal payoff and percentage. A real loan may instead have yield maintenance, defeasance, a step-down or another calculation. Replace the input with the actual payoff economics rather than assuming a simple percentage applies.

Property cash flow during the closing period is listed separately after existing debt payments and reserves. It is not deducted again from refinance proceeds or treated as a new loan fee. The result assumes the entered rent roll continues through closing; tenant rollover or a major capital project needs a separate timing analysis.

What to verify for a real property

Lease expiry concentration and tenant credit can change the loan size even when historical NOI is strong.
Reimbursements must match lease provisions and actual recoverable expenses.
The payoff statement can include accrued interest, legal charges and prepayment costs beyond the entered principal. Add those to closing costs when applicable.

Use the published program parameters as the starting program reference. The OCC commercial real estate lending handbook provides general background on development and income-property lending risks; it does not set Jaken Finance Group’s terms.