Macro Stress Index — Decision Platform for Senior Housing & Care
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Indicator Register — seventeen stress pillars
Sixteen pillars, each a weighted composite of its own indicators, roll up to the headline index: the eight-pillar macro core (P1–P8, 71 points, the basis the §9 threshold is calibrated on) plus the eight sector pillars (P9–P16, 54 points) that measure senior housing's own stress channels — care labor, the housing-wealth transfer that funds private pay, reimbursement policy, sector capital markets, insurance & liability cost, construction-input inflation, the demand-and-supply balance that sets occupancy and rate power, and operator & counterparty health. Weights are adjustable from the top bar — the composite, the trailing strip, and the pattern-engine rankings all recompute live. Each card closes with the transmission channel into senior housing & care.
All 17 pillars, in register order. Largest movers this month: Corporate Health, Housing & Wealth Transfer, Insurance & Liability Cost.
Treasury & Sovereign Risk
8% wt
Mini briefStress here reads 66.0 out of 100 — "Stress" — worse than last month (up 1.0 of 100 points), and 0.4 points worse than three months ago. On today's snapshot that makes it one of the 17 pressure points we track that is causing the most strain right now (ranked #1). Higher numbers always mean more pressure on the sector.
What this measures
This tracks what the U.S. government pays to borrow money for ten to thirty years. Nearly every mortgage on a senior housing property is priced off that number, so it sets the base cost of debt for the whole sector.
What the current reading means
Borrowing is getting more expensive. Buyers can pay less for the same building, and owners with loans coming due face a bigger payment when they refinance.
Why it matters to you
Watch it because it moves values without anything changing at the building itself. If it keeps rising, get refinancing lined up early; if it falls, that is the window to lock a new loan.
The institutional read
This is the origin node of the refinancing-wall chain: sustained long-end pressure passes into cap rates with a two-to-three-quarter lag, and it shortens the window in which agency executions price well.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Credit Markets
8% wtMini briefStress here reads 54.0 out of 100 — "Elevated" — worse than last month (up 0.4 of 100 points), and 0.8 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #11). Higher numbers always mean more pressure on the sector.
What this measures
This measures the extra interest lenders demand on top of the government rate to compensate for risk — the 'risk premium' in a loan.
What the current reading means
Lenders are getting nervous. Loans cost more and come with tighter terms, even if the government rate has not moved at all.
Why it matters to you
This is usually the first thing to move when credit conditions change, so treat it as the early-warning light for deal financing.
The institutional read
Wider spreads price the marginal dollar of sector debt. Bridge-to-agency execution is the first casualty; LP return hurdles reset next, which slows recap flow before it slows acquisitions.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Consumer Stress
7% wtMini briefStress here reads 61.0 out of 100 — "Elevated" — worse than last month (up 0.6 of 100 points), and 0.7 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #4). Higher numbers always mean more pressure on the sector.
What this measures
This tracks the financial health of ordinary households — savings, debt payments, confidence. Most residents and their families pay for care out of their own pockets, so household finances are effectively the customer's balance sheet.
What the current reading means
Families are under more financial strain. Expect slower decisions to move in, more price sensitivity, and more discounts to fill units.
Why it matters to you
The effect shows up about two to three quarters later, so today's reading is a forecast of next year's occupancy and rent growth.
The institutional read
Demand for care is needs-based, but the payer is a family balance sheet. Sustained deterioration here shows up as slower private-pay move-in velocity and thinner rate-increase tolerance two to three quarters out.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Banking & Liquidity
8% wtMini briefStress here reads 49.0 out of 100 — "Elevated" — better than last month (down 2.1 of 100 points), and 0.2 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #14). Higher numbers always mean more pressure on the sector.
What this measures
This measures stress in regional and community banks — the lenders that actually finance construction and short-term loans for this sector.
What the current reading means
These banks are lending again. Construction and short-term loans become available at the margin, and lenders are more patient with maturing loans.
Why it matters to you
Less construction hurts owners refinancing today but helps them in a few years, because fewer competing buildings open.
The institutional read
Easing bank stress restores construction and bridge credit at the margin, and it lengthens lender patience on maturing loans — the link in the refinancing chain that reverses fastest.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Corporate Health
6% wtMini briefStress here reads 52.0 out of 100 — "Elevated" — worse than last month (up 3.1 of 100 points), and 4.7 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #12). Higher numbers always mean more pressure on the sector.
What this measures
This tracks the health of large companies — profits, debt loads, layoffs. It reaches senior housing through jobs, the vendors operators buy from, and the credit quality of the big landlords that own portfolios.
What the current reading means
Corporate conditions are weakening. Job losses and vendor problems filter through slowly, and large landlords tighten their own underwriting.
Why it matters to you
This is a slow-moving channel, but it compounds — treat it as background pressure rather than a near-term trigger.
The institutional read
Corporate deterioration reaches this sector through employment, REIT tenant credit, and the vendors and payors operators contract with — a slow channel, but it compounds.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Inflation & Policy
6% wtMini briefStress here reads 57.0 out of 100 — "Elevated" — worse than last month (up 2.4 of 100 points), and 3.1 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #9). Higher numbers always mean more pressure on the sector.
What this measures
This tracks inflation and the interest-rate policy that responds to it. Wages are the single largest expense in running a senior housing community, so inflation here lands directly on the operating budget.
What the current reading means
Costs are rising faster again. Wage and supply expenses climb, profit margins get squeezed, and interest-rate relief gets pushed further out.
Why it matters to you
Rising costs hurt twice: once on the expense line, once by delaying cheaper debt. That is why this pillar carries so much weight.
The institutional read
This is the sector's largest cost line. Re-accelerating wage and price pressure delays the rate path, and it puts the margin recovery built on agency-hour reduction back at risk.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Global Shocks
5% wtMini briefStress here reads 63.0 out of 100 — "Elevated" — better than last month (down 0.6 of 100 points), and 2.8 points better than three months ago. On today's snapshot that makes it one of the 17 pressure points we track that is causing the most strain right now (ranked #3). Higher numbers always mean more pressure on the sector.
What this measures
This tracks stress outside the United States — energy prices, shipping, currencies, geopolitics. It reaches this sector through utility bills, insurance costs, and building material prices.
What the current reading means
Cost pressure from abroad is easing, though the flight-to-safety demand from international investors eases along with it.
Why it matters to you
The cost effect is immediate; the investment-demand effect is slower and partly offsetting.
The institutional read
Cost pressure on energy, insurance and construction inputs eases, though the defensive-capital bid that global stress creates eases with it.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Market Structure
6% wtMini briefStress here reads 58.0 out of 100 — "Elevated" — better than last month (down 0.4 of 100 points), and 1.8 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #6). Higher numbers always mean more pressure on the sector.
What this measures
This measures how fragile financial markets are right now — how much price swing, how thin trading is, how easily buyers and sellers find each other.
What the current reading means
Markets are steadier, so prices respond to real fundamentals instead of to panic and positioning.
Why it matters to you
This pillar does not create problems on its own; it decides how hard any other problem hits.
The institutional read
Healthier market structure dampens transmission — agency MBS spreads and REIT equity cost of capital reprice on fundamentals rather than on positioning.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Labor & Care Workforce
7% wtMini briefStress here reads 55.0 out of 100 — "Elevated" — worse than last month (up 2.4 of 100 points), and 4.9 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #10). Higher numbers always mean more pressure on the sector.
What this measures
This tracks the availability and cost of caregivers, nurses, and support staff. Staffing — not demand for care — is what limits how many residents a community can actually serve.
What the current reading means
Hiring is getting harder and more expensive. Communities cannot fill beds they have demand for, and expensive temporary agency staffing creeps back in.
Why it matters to you
If staffing is tight, do not underwrite occupancy gains you cannot staff. This is the most common way a projection fails.
The institutional read
Staffing is the binding constraint on census, not demand. The August payrolls report was firmer than feared, which keeps caregiver recruitment competitive and makes the labor-force expansion the key variable to watch.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Housing & Wealth Transfer
6% wtMini briefStress here reads 58.0 out of 100 — "Elevated" — better than last month (down 2.5 of 100 points), and 3.9 points better than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #6). Higher numbers always mean more pressure on the sector.
What this measures
This tracks the housing market — home prices, sales activity, mortgage rates. Many residents fund a move by selling the family home, so housing liquidity is the funding source for private-pay move-ins.
What the current reading means
Homes are selling more easily, which frees up the money that funds private-pay move-ins.
Why it matters to you
Move-ins typically respond one to two quarters after home sales turn, so this reading leads occupancy.
The institutional read
Improving housing liquidity releases the deposits and entrance fees that fund private-pay move-ins; move-in velocity typically responds one to two quarters after home-sale momentum turns.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Reimbursement & Regulatory
5% wtMini briefStress here reads 52.0 out of 100 — "Elevated" — better than last month (down 0.6 of 100 points), and 3.6 points better than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #12). Higher numbers always mean more pressure on the sector.
What this measures
This tracks what government programs — mainly Medicare and Medicaid — pay for care. For nursing and other care-heavy properties, those programs set the ceiling on revenue.
What the current reading means
Government payment rates are keeping better pace with costs, which supports care-heavy profits and widens the set of properties that can be financed.
Why it matters to you
This is the one pressure that cheaper debt cannot fix. Care-heavy properties should be stress-tested against it directly.
The institutional read
Reimbursement is closing the gap on cost inflation, which supports care-heavy NOI and widens the set of assets that can be underwritten without a private-pay mix shift.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Sector Capital Markets
4% wtMini briefStress here reads 60.0 out of 100 — "Elevated" — worse than last month (up 0.2 of 100 points), and 0.7 points better than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #5). Higher numbers always mean more pressure on the sector.
What this measures
This measures the debt and equity available specifically for senior housing and care — not credit in general, but the money this sector actually transacts on.
What the current reading means
Capital for this sector is scarce or expensive. Deals take longer, need more equity, and some owners run out of runway.
Why it matters to you
Scarce capital is painful now but creates the best buying opportunities, because sellers become motivated.
The institutional read
This is where 'credit is tight' becomes 'our credit is tight': the availability and pricing of the debt and equity this sector actually transacts on. Adverse today, constructive for 2027–28 inventory scarcity.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Insurance & Liability Cost
5% wtMini briefStress here reads 64.0 out of 100 — "Elevated" — worse than last month (up 2.5 of 100 points), and 2.9 points worse than three months ago. On today's snapshot that makes it one of the 17 pressure points we track that is causing the most strain right now (ranked #2). Higher numbers always mean more pressure on the sector.
What this measures
This tracks property and liability insurance premiums — now the fastest-rising cost that operators can partly control, driven by hurricanes, wildfires, and lawsuit trends.
What the current reading means
Premiums are climbing. Higher insurance costs reduce profit directly, and because value is a multiple of profit, they reduce the property's worth.
Why it matters to you
Start renewals early, revisit deductibles, and include an insurance stress case in every hold-or-sell decision.
The institutional read
Premiums are now the fastest-rising controllable line in operating budgets. Catastrophe-driven reinsurance repricing lands on every facility's expense ratio and, through NOI, on valuation — renew earlier, re-underwrite deductibles, and stress-test insurance in every hold-sell model.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Construction Inputs & Development Cost
5% wtMini briefStress here reads 47.0 out of 100 — "Elevated" — better than last month (down 1.9 of 100 points), and 2.8 points better than three months ago. On today's snapshot that makes it one of the calmest of the 17 pressure points we track (ranked #15). Higher numbers always mean more pressure on the sector.
What this measures
This tracks the cost of building — materials, labor, land, and construction financing for new senior housing.
What the current reading means
Building is getting cheaper, so new projects start to work financially again — good for developers, but it erodes the scarcity advantage existing buildings enjoy.
Why it matters to you
When it costs more to build than to buy, existing properties are the better value. That gap is worth checking before any development decision.
The institutional read
Falling input costs make new development pencil again — supportive for pipeline economics, but it erodes the replacement-cost protection that existing stock has enjoyed.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Demand & Supply Balance
5% wtMini briefStress here reads 38.0 out of 100 — "Watch" — worse than last month (up 1.5 of 100 points), and 2.8 points worse than three months ago. On today's snapshot that makes it one of the calmest of the 17 pressure points we track (ranked #17). Higher numbers always mean more pressure on the sector.
What this measures
Demand & Supply Balance
The institutional read
The sector's own fundamentals: absorption against a stalled pipeline is what converts demographic demand into occupancy and rate power, and it is the only pillar that scores NOI growth rather than the cost of capital.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Operator & Counterparty Health
5% wtMini briefStress here reads 58.0 out of 100 — "Elevated" — worse than last month (up 1.8 of 100 points), and 2.3 points worse than three months ago. On today's snapshot that makes it middle of the pack among the 17 pressure points we track (ranked #6). Higher numbers always mean more pressure on the sector.
What this measures
Operator & Counterparty Health
The institutional read
Systemic operator failure is how 2008 and 2018–19 actually hurt owners: coverage, agency reliance and transition activity decide whether the rent and the debt service actually arrive, independent of rates.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
Growth Nowcast (GDPNow)
4% wtMini briefStress here reads 44.0 out of 100 — "Watch" — worse than last month (up 0.8 of 100 points), and 2.2 points worse than three months ago. On today's snapshot that makes it one of the calmest of the 17 pressure points we track (ranked #16). Higher numbers always mean more pressure on the sector.
What this measures
Growth Nowcast (GDPNow)
The institutional read
The earliest read on whether the economy is still expanding: current-quarter growth drives family income and home-sale velocity behind private-pay move-ins, occupancy expectations lenders underwrite to, and the timing of the rate path — a nowcast deteriorating ahead of the published data is the first warning the demand and capital-markets pillars will follow.
SeniorCRE Macro Stress Index · derived from the same live snapshot as the Daily Brief
The pattern engine expresses today’s eight-pillar setup as a vector and measures its weighted distance to nine past dislocations. Similarity is a rhyme score, not a forecast — the detail view shows what matches, what differs, what followed, and how senior housing & care behaved through the episode.
US downgrade / eurozone crisis
What rhymes
- Sovereign pillar hottest of the eight, as now
- Credit orderly while rate volatility spiked
- Policy constrained by inflation optics
- Global risk premium elevated (Europe then, multipolar now)
What differs
- 2011 had a debt-ceiling standoff as the proximate trigger
- Banks then were still deleveraging post-GFC; today's issue is CRE concentration
- Fed could pledge zero rates for years; today's floor is higher
What happened next
Equities fell ~19% peak-to-trough, then recovered within a year; the 10Y yield collapsed as Treasuries stayed the safe asset despite the downgrade. No recession followed.
Senior housing & care through the episode
Cap rates barely moved — the sector traded as a defensive, needs-based asset. Occupancy recovery from the 2009 trough continued uninterrupted, and cheap post-shock debt fueled the 2012–15 development boom (a supply lesson worth remembering).
Stress does not jump from a Treasury auction to an operating margin in one step — it propagates through links, each with a direction, a typical lag, and a current status. Three mapped chains matter most for senior housing & care. Note the third: not every macro shock is adverse for this sector.
| Link | Status | Typical lag | Current reading |
|---|---|---|---|
| Term premium → cap rates | Active | 2–3 quarters | Roughly 60–70% of a sustained long-end move has historically passed into sector cap rates, with the needs-based premium compressing the beta. |
| Cap rates → valuations | Active | 1–2 quarters | Appraisals lag transactions; loan-level marks lag appraisals. The bid-ask spread is where the gap shows first. |
| Valuations → refi gap | Building | At maturity | Loans underwritten at 2020–21 values meet today's proceeds tests; the gap must be filled with equity, mezz, or a sale. |
| Refi gap → forced sales | Building | 2–4 quarters | Lenders extend while rates are expected to fall; patience shortens if the cut path gets priced out. |
What it means for senior housing & care
This chain is simultaneously the sector's largest risk and its largest opportunity. Operators and owners with 2026–27 maturities need executions staged now; buyers with committed capital are positioned for the recap flow the chain produces. The pivot point to watch is link four — lender patience — which is a direct function of the rate-cut probabilities on the next tab.
Scenario probabilities over 30, 90, and 180 days, conditioned on the current pillar setup and the closest historical analogs. Probabilities are for defined, checkable events — each row names its drivers and its consequence for senior housing & care capital and operations.
| Event | 30d | 90d | 180d | Senior housing & care implication |
|---|---|---|---|---|
| 10Y Treasury closes above 5.25%Drivers: Auction tails, term premium, issuance calendar | 12% | 22% | 31% | Extends the transaction freeze and widens refi gaps; agency debt stays the only reliable execution. |
| HY OAS widens past 450 bpDrivers: Credit pillar momentum, downgrade ratio, fund flows | 18% | 30% | 38% | Bridge and mezz pricing gaps out first; recap and preferred-equity structures price through it. |
| Fed cuts ≥ 50 bp cumulativeDrivers: Disinflation trend, labor cooling, financial-stability pressure | 20% | 44% | 63% | Reopens the refinancing window; staged executions capture it — starting the process after the cut is too late. |
| NBER-dated recession beginsDrivers: Consumer stress, corporate coverage, labor momentum | 15% | 28% | 42% | Demand is needs-based and holds; the exposure is family finances slowing private-pay move-ins and lengthening decision cycles. |
| Regional bank failure (> $25B assets)Drivers: CRE reserve builds, HTM losses, deposit behavior | 6% | 11% | 17% | Construction credit tightens further — near-term workout noise, medium-term supply tailwind (chain three). |
| Core inflation re-accelerates above 3.5%Drivers: Wage floor, energy pass-through, tariff and freight costs | 14% | 24% | 30% | Reverses the wage-channel margin recovery and prices out cuts — the single worst combined scenario for the sector. |
| Equity drawdown ≥ 15% (S&P 500)Drivers: Market-structure fragility, concentration, vol positioning | 16% | 27% | 36% | REIT equity issuance closes and public-to-private math flips; private capital with dry powder gains relative position. |
- a · Market-implied
- Where an instrument exists: fed funds futures for the rate-path rows, index options for the drawdown row. These anchor the estimate.
- b · Conditional base rates
- Historical frequency of the event within the horizon, conditioned on the composite's current regime band, from 1990–present point-in-time history.
- c · Analog adjustment
- Base rates re-weighted toward the outcomes of the top-three analogs in proportion to their similarity scores.
- d · Judgment overlay
- Bounded at ±10 points, permitted only with a logged written rationale.
Events are defined, checkable, and name their resolution source in advance (§6.1); never narratives. Published probabilities are logged immutably and scored quarterly on Brier score and reliability against the climatological base rate (§6.3).
Probabilities are model outputs on demonstration data; they are illustrative, sum across rows is not meaningful, and none of this is investment advice.
The index sits at 55.4, in the upper half of the Elevated band and still building (+0.5 over one month, +0.8 over three, 96th percentile of the trailing 24 months). Treasury & Sovereign Risk is the hottest of the 17 pillars at 66.0. The pattern engine's closest rhyme is Aug 2011 at 82% match. The base case remains repricing rather than rupture, but the burden of proof has moved to the improving pillars.
Daily Brief
What changed — largest one-month moves
Sector transmission — the six channels that decide outcomes
Why it matters
The composite's message is a divergence, not a level: corporate health and insurance & liability cost are building while housing & wealth transfer and banking & liquidity improve. Historically this configuration resolves through the policy pillar: either the rate path holds — Inflation & Policy is at 57.0, rose +2.4 on the month — and the Treasury pillar cools from 66.0 (the 2018-style path), or inflation re-accelerates, the cut path reprices, and lender patience on maturing loans shortens (the path with no clean analog). The probability table is conditioned on the same pillar vector and currently favors the first.
Forward look — probabilities, analogs, regimes and rhymes
Forward look
Probabilities, analogs, regimes and rhymes — not a forecastThis is not a forecast. It is four grounded lenses on the same live snapshot: the conditional probabilities already published in the probability table, the historical episodes whose pillar vectors most resemble today, the pillars closest to crossing a band boundary, and what each of those means for the assumptions in the underwriting model. The composite reads 55.4 (Elevated, +0.5 / 1m, +0.8 / 3m). Probabilities are conditional on that vector and move with it; analogs describe what happened next in the past, not what will happen now.
How well the published probability table is anchored to the live pillar vector it is conditioned on.
Probabilities are conditional on the current pillar vector and reprice as it moves. Analogs describe documented outcomes of past episodes, not expected outcomes of this one. Not investment, legal, or accounting advice.
What it means for senior housing & care
Capital
Treasury & Sovereign is rose +1.0 on the month at 66.0 — hold the staged-refinancing posture. Term sheets current, agency executions pre-positioned for a window rather than timed to one, and no relaxation of 2026–27 maturity work: lender patience is the link that reverses fastest.
Operations
Inflation & Policy rose +2.4 to 57.0, putting the wage-channel margin recovery back under pressure. Defend the agency-hour gains first; treat rate increases as a cost recovery rather than a margin expansion this cycle.
Strategy
Banking & Liquidity at 49.0 (-2.1 / 1m) eases construction credit at the margin, though the pipeline remains at decade lows. Recapitalization and acquisition flow out of the refinancing chain stays the highest-conviction deployment channel for committed capital.
Watch — next five sessions (Thu, Sep 17 – Wed, Sep 23)
- Thu, Sep 17Retail sales (Census) — private-pay demand read: the family balance sheet behind move-in velocity Consumer Stress
- Fri, Sep 18HY fund flows · weekly spread close — a second week of outflows would confirm the credit pillar's drift Credit Markets
- Mon, Sep 21Existing / new home sales — the home-sale channel that funds entrance fees and private-pay conversions Housing & Wealth Transfer
- Tue, Sep 22Coupon auctions — 2Y / 5Y / 7Y notes — tails or weak bid-to-cover would extend the sovereign pillar's move Treasury & Sovereign
- Wed, Sep 23Weekly close — cross-asset positioning — market-structure fragility decides how violently any shock transmits Market Structure
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The threshold-to-action layer (§7) is what makes this a decision platform rather than an alerting service. Triggers are mechanical and confirmed under the hysteresis rule; the commitments are made once, calmly, and executed when hit — judgment moves from the day of the trigger to the day of ratification.
| Trigger (confirmed per §4.3) | Current reading | Pre-committed action | Domain | Owner | Review |
|---|---|---|---|---|---|
| Composite enters Stress (≥ 65.0, confirmed per §4.3) | Clear · not armedComposite 55.4 · 9.6 pts belowNeeds PIT: Treasury & Sovereign Risk (0/240 mo), Credit Markets (0/98 mo), Consumer Stress (0/240 mo), Banking & Liquidity (0/220 mo), Corporate Health (0/97 mo), Inflation & Policy (0/240 mo), Global Shocks (0/188 mo), Market Structure (0/240 mo), Labor & Care Workforce (0/60 mo), Housing & Wealth Transfer (0/60 mo), Reimbursement & Regulatory (0/60 mo), Sector Capital Markets (0/60 mo), Insurance & Liability Cost (0/60 mo), Construction Inputs & Development Cost (0/60 mo), Demand & Supply Balance (0/60 mo), Operator & Counterparty Health (0/60 mo) — composite basis reads every pillar | Pause new acquisitions under LOI pending a refreshed underwriting rate deck; convene capital review within 48 hours | Strategy | CEO | 48 h |
| Fed-cut probability (90d row) ≥ 50% | Approaching · not armed90d cut probability 44%Needs PIT: Inflation & Policy (0/240 mo) | Launch staged refinancing executions on all 2026–27 maturities; agency term sheets to final | Capital | Capital lead | Weekly |
| 10Y close > 5.25% for 5 sessions | Clear · not armed10Y 4.62% · 0 of 5 sessionsNeeds PIT: Treasury & Sovereign Risk (0/240 mo) | Re-run proceeds tests on every floating or maturing loan; escalate any coverage-breach projection to lender dialogue | Capital | Capital lead | Per event |
| HY OAS ≥ 450 bp for 5 sessions | Clear · not armedHY OAS 368 bp · 0 of 5 sessionsNeeds PIT: Credit Markets (0/98 mo) | Underwriting switches to agency-only debt assumptions; bridge-dependent deals re-priced or shelved | Capital | Capital lead | Per event |
| Core PCE 3m annualized ≥ 3.5% for 2 prints | Clear · not armedCore PCE 2.9% · 0 of 2 printsNeeds PIT: Inflation & Policy (0/240 mo) | Reprice wage assumptions in all operating budgets +100 bp; freeze census expansion that depends on agency labor | Operations | Ops lead | Monthly |
| P4 Banking & Liquidity ≥ 65.0 | Clear · not armedP4 49.0 · 16.0 pts belowNeeds PIT: Banking & Liquidity (0/220 mo) | Review deposit and lender counterparty exposure; accelerate committed-capital acquisition pipeline (supply-paradox posture) | Strategy | CEO | Weekly |
| P3 Consumer Stress ≥ 65.0 | Approaching · not armedP3 61.0 · 4.0 pts belowNeeds PIT: Consumer Stress (0/240 mo) | Stress-test move-in velocity and rate-increase assumptions in forward census plans; tighten entrance-fee credit review | Operations | Ops lead | Monthly |
| Composite returns to Watch (< 45.0, confirmed) | Clear · not armedComposite 55.4 · 10.4 pts aboveNeeds PIT: Treasury & Sovereign Risk (0/240 mo), Credit Markets (0/98 mo), Consumer Stress (0/240 mo), Banking & Liquidity (0/220 mo), Corporate Health (0/97 mo), Inflation & Policy (0/240 mo), Global Shocks (0/188 mo), Market Structure (0/240 mo), Labor & Care Workforce (0/60 mo), Housing & Wealth Transfer (0/60 mo), Reimbursement & Regulatory (0/60 mo), Sector Capital Markets (0/60 mo), Insurance & Liability Cost (0/60 mo), Construction Inputs & Development Cost (0/60 mo), Demand & Supply Balance (0/60 mo), Operator & Counterparty Health (0/60 mo) — composite basis reads every pillar | Stand down elevated postures by explicit decision, not by lapse; log the stand-down | All | CEO | Per event |
- No trigger may resolve to “monitor” — monitoring is the platform's job, not an action.
- Every stand-down is an explicit, logged decision, so postures cannot decay silently.
Actions are proposals structured for ratification (§12) — pre-commitments bind only once ratified. Owners are named by role. Triggers evaluate against partial-live readings and stay unarmed until the §9 gate passes and every pillar they read has the required point-in-time vintages on file (§9 PIT readiness) — the sector pillars P9–P16 need 60 as-published months, and composite triggers need all seventeen.
The full register and mathematics behind every number on this page: 106 indicators across seventeen pillars with their feeds, frequencies, access tier, and normalization map, plus the aggregation, hysteresis, similarity, brief-pipeline, backtest, and governance rules the live build must satisfy before the Demonstration label comes off.
Indicator register — 106 indicators, 17 pillars (§3)
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| 10Y term premium | NY Fed ACM model (daily); alt Kim–Wright via FRED THREEFYTP10 | D | Public | z-logistic; higher = stress |
| Avg auction tail (6 auc.) | TreasuryDirect auction results API (10Y/30Y bid-to-cover) vs 1:00 pm when-issued quote | Per auction | Proxy | Tail in bp; public proxy = bid-to-cover until WI feed lands |
| Net interest / revenue | Treasury Monthly Statement (MTS); FRED interest outlays and receipts (BEA quarterly NIPA aggregates A091RC1Q027SBEA / W006RC1Q027SBEA) | Q (~2m lag) | Public | Percentile vs 10-yr window |
| MOVE index | ICE BofA MOVE index (licensed target); 20d realized vol of DGS10 running as proxy | D | Proxy | z-logistic |
| USA 5Y CDS | S&P Global (Markit) CDS pricing (licensed target); 4-week bill yield − fed funds (FRED DTB4WK, DFF) running as proxy | D | Proxy | z-logistic |
| Foreign official demand | Fed H.4.1 custody memo line (W); Treasury TIC / Z.1 foreign holdings of federal debt (FRED FDHBFIN, quarterly, published ~2 quarters behind the reference quarter) | Q (~2q lag) | Public | Inverted: falling demand = stress |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| HY OAS | ICE BofA US High Yield OAS — FRED BAMLH0A0HYM2 | D | Public | z-logistic |
| IG OAS | ICE BofA US Corporate OAS — FRED BAMLC0A0CM | D | Public | z-logistic |
| Distress ratio (HY) | S&P Global distress ratio (licensed target); ICE BofA CCC−BB OAS gap (FRED BAMLH0A3HYC, BAMLH0A1HYBB) running as proxy | D | Proxy | Percentile |
| Lev-loan default rate | Morningstar LSTA US Leveraged Loan Index (licensed target); Fed business-loan delinquency rate (FRED DRBLACBS) running as proxy | Q | Proxy | Percentile |
| CLO BB spread | Palmer Square / dealer runs (published levels) | W | Proxy | z-logistic; confirm redistribution terms |
| Downgrades / upgrades | Public rating-action feeds (count basis); agency analytics for par basis | M | Proxy | Ratio > 1 = stress; percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Card 90d+ delinquency | NY Fed Household Debt & Credit; FRED DRCCLACBS | Q | Public | Percentile |
| Auto 60d+ delinquency | NY Fed Household Debt & Credit (delinquency transitions) | Q | Public | Percentile |
| Personal savings rate | BEA — FRED PSAVERT | M | Public | Inverted percentile |
| Real income growth | BEA — FRED DSPIC96 | M | Public | Inverted percentile |
| Sentiment (index) | University of Michigan — FRED UMCSENT (final monthly print lands ~1 month after the survey month) | M (~1m lag) | Public | Inverted percentile |
| Bottom-40% cash buffer | JPMorganChase Institute / Bank of America Institute publications | Irregular | Proxy | Judgment-flagged; staleness decay applies |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Unrealized losses / CET1 | FDIC Quarterly Banking Profile | Q | Public | Percentile |
| CRE / tier-1 capital | FDIC call-report aggregates — CRE loans / tier-1 capital | Q | Public | Percentile |
| FHLB advances | FHLB Office of Finance combined financials; Fed Z.1 | Q | Public | Percentile |
| Reserves / GDP | Fed H.4.1 — FRED WRESBAL; BEA GDP | W | Public | Inverted percentile |
| SOFR − IORB spread | FRED SOFR, IORB (computed) | D | Public | z-logistic; positive spread = stress |
| Discount-window & facility usage | Fed H.4.1 (primary credit and successor facilities) | W | Public | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Median interest coverage | S&P Capital IQ / Compustat universe (licensed target); Z.1/NIPA aggregate coverage (FRED NFCPATAX, BOGZ1FA106130001Q) running as proxy | Q | Proxy | Inverted percentile |
| Maturity wall (24 mo) | SIFMA outstanding + issuance (approximation); agency refunding studies | Q | Proxy | Percentile |
| Corporate margin trend | BEA corporate profits vs gross value added (computed) | Q | Public | Inverted percentile |
| Zombie-firm share | Licensed fundamentals screen (ICR < 1, 3 yrs) as target; nonfinancial corporate debt securities ÷ GDP (FRED NCBDBIQ027S, GDP) running as proxy | Q | Proxy | Percentile |
| Capex intentions | Fed district surveys — Philadelphia, Dallas, Richmond (computed) | M | Public | Inverted z-logistic |
| Ch.11 filings pace | US Courts quarterly statistics; commercial trackers monthly | Q / M | Public | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Core PCE (3m ann.) | BEA — FRED PCEPILFE (computed 3m annualized) | M | Public | Distance from 2% target, two-sided |
| ECI wage growth | BLS Employment Cost Index (Q); Atlanta Fed Wage Growth Tracker as monthly bridge | Q / M | Public | Percentile |
| 5y5y breakeven | FRED T5YIFR | D | Public | Distance from anchor, two-sided |
| Policy gap vs. rule | Computed from public inputs (Atlanta Fed Taylor Rule Utility method) | M | Public | Two-sided z-logistic |
| Cuts priced (12 mo) | CME FedWatch / fed funds futures | D | Public | Direction input to the probability engine, not scored alone |
| QT runoff pace | Fed H.4.1 SOMA holdings (computed 3m run rate) | W | Public | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Geopolitical risk index | Caldara–Iacoviello GPR (public release) | M (D avail.) | Public | Percentile |
| Oil volatility (OVX) | Cboe OVX | D | Public | z-logistic |
| Freight stress composite | Freightos FBX + Drewry WCI headline indices (licensed target); BLS PPI deep-sea freight transportation (FRED PCU483111483111) running as the public monthly proxy | M (~1m lag) | Public | z-logistic |
| EM FX pressure | Computed z-score of EM currency basket vs USD from public FX rates | D | Public | z-logistic |
| China credit impulse | PBoC total social financing + NBS GDP; vendor series as check | M | Proxy | Inverted; methodology-sensitive, flagged |
| JPY carry stress | Realized USDJPY vol × rate differential (public proxy); implied vol when licensed | D | Proxy | z-logistic |
| Foreign 10Y impulse (JGB/Bund/Gilt) | Foreign 10Y sovereign basket — JGB, Bund, Gilt 3m yield change — FRED IRLTLT01JPM156N, IRLTLT01DEM156N, IRLTLT01GBM156N | M (~2m lag) | Public | z-logistic; leading signal, rising foreign yields = stress |
| JGB 10Y level | Japan 10Y government bond yield — FRED IRLTLT01JPM156N | M (~2m lag) | Public | z-logistic; level vs 10-yr window, higher = stress |
| Gilt long-end level | UK long-end gilt yield (30Y licensed target); OECD UK 10Y government bond yield — FRED IRLTLT01GBM156N — running as the public proxy | M (~2m lag) | Proxy | z-logistic; level vs 10-yr window, higher = stress |
| Global sovereign yield composite | Global sovereign yield composite — equal-weight JGB / Bund / Gilt 10Y level — FRED IRLTLT01JPM156N, IRLTLT01DEM156N, IRLTLT01GBM156N | M (~2m lag) | Public | z-logistic; level vs 10-yr window, higher = stress |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| VIX term structure | Cboe VIX − VIX3M (computed spread) | D | Public | Inversion = stress; z-logistic |
| Top-10 index weight | S&P DJI factsheets (monthly) | M | Public | Percentile |
| UST basis-trade leverage | CFTC Traders in Financial Futures — leveraged-fund net UST futures shorts | W | Public | Percentile |
| 0DTE share of volume | Cboe published volume statistics / commentary | M | Proxy | Percentile |
| Futures order-book depth | CME market-by-price via vendor (licensed target); 20d realized vol of the VIX (FRED VIXCLS) running as inverse-depth proxy | D | Proxy | z-logistic on inverse depth |
| Cross-asset correlation | Computed correlation matrix from public prices (60d avg) | D | Public | z-logistic |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Care-facility employment | BLS CES — nursing & residential care facilities employment, FRED CES6562300001, y/y | M | Public | Inverted percentile: falling staffing capacity = stress |
| Health-care quits rate | BLS JOLTS quits rate, health care & social assistance — FRED JTS6200QUR | M (~5w lag) | Public | Percentile; higher care-staff turnover = stress |
| Health-services wage growth | BLS CES — average hourly earnings, private education & health services, FRED CES6500000003, 3m annualized | M | Public | Percentile |
| Care openings per hire | BLS JOLTS health-care & social-assistance openings ÷ hires — FRED JTS6200JOL, JTS6200HIL | M (~5w lag) | Public | Percentile; more openings per care hire = tighter labor |
| Prime-age employment ratio | BLS CPS prime-age (25–54) employment–population ratio — FRED LNS12300060 | M | Public | Percentile; a tighter labor market raises care-staffing cost |
| Private wage floor | State minimum-wage schedules (licensed/manual target); total-private average hourly earnings 3m annualized (FRED CES0500000003) running as the wage-floor proxy | M | Proxy | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Home price growth | S&P CoreLogic Case–Shiller US national home price index — FRED CSUSHPINSA, y/y | M (~2m lag) | Public | Inverted percentile: falling prices = stress |
| Home sales momentum | Census new one-family houses sold — FRED HSN1F, y/y (home-sales momentum proxy) | M | Public | Inverted percentile |
| Months' supply | Census months' supply of houses — FRED MSACSR | M | Public | Percentile |
| 30Y mortgage rate | Freddie Mac 30-year fixed mortgage rate — FRED MORTGAGE30US | W | Public | Percentile |
| Homeowner equity | Fed Z.1 owners' equity in household real estate — FRED OEHRENWBSHNO, y/y | Q | Public | Inverted percentile |
| Median days on market | Realtor.com median days on market — FRED MEDDAYONMARUS | M | Public | Percentile; slower sales = delayed move-ins |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Cost-to-reimbursement gap | Computed cost-to-reimbursement gap: BLS PPI nursing care facilities (FRED PCU623110623110) y/y − medical care CPI (FRED CPIMEDSL) y/y | M | Proxy | Percentile; cost outrunning reimbursement = stress |
| Medical services CPI | BLS medical care CPI — FRED CPIMEDSL, y/y (escalator reference) | M | Public | Inverted percentile: weak medical inflation caps escalators |
| State & local tax receipts | BEA state & local government current tax receipts — FRED W070RC1Q027SBEA, y/y | Q | Public | Inverted percentile: weak receipts pressure Medicaid budgets |
| Federal deficit (12m) | Treasury Monthly Statement federal surplus/deficit — FRED MTSDS133FMS, trailing 12-month sum | M | Public | Inverted percentile: wider deficit = federal reimbursement austerity risk |
| State government employment | Minimum-staffing rule and survey/enforcement intensity (manual target); BLS CES state government employment (FRED CES9092000001) y/y running as administrative-capacity proxy | M | Proxy | Inverted percentile |
| Care-facility PPI | BLS PPI nursing care facilities — FRED PCU623110623110, y/y | M | Public | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| CRE loan delinquency | Fed Board delinquency rate on CRE loans excl. farmland — FRED DRCRELEXFACBS | Q | Public | Percentile |
| CRE price index | BIS/Fed US commercial real estate price index — FRED COMREPUSQ159N, y/y (BIS compiles with a ~3-quarter reporting lag) | Q (~3q lag) | Public | Inverted percentile |
| Bank CRE loan growth | Fed H.8 commercial real estate loans, all commercial banks — FRED CREACBM027NBOG, y/y | M | Public | Inverted percentile: contracting CRE credit = stress |
| REIT equity trend | Nasdaq US Benchmark Health Care REITs total-return index — FRED NASDAQNQUSB35102010T, y/y (sector equity cost-of-capital read) | D | Public | Inverted percentile |
| Bank tightening (net %) | Fed SLOOS net percentage tightening standards, large & middle-market C&I — FRED DRTSCILM (CRE-standards proxy pending the CRE panel series) | Q | Proxy | Percentile |
| Multifamily starts | Census multifamily (5+ unit) housing starts — FRED HOUST5F, y/y | M | Public | Inverted percentile: rationed construction credit shows here first |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| P&C insurance pricing | BLS PPI direct property & casualty insurance carriers — FRED PCU524126524126, y/y | M | Public | Percentile; faster premium inflation = stress |
| Real insurance escalation | Computed real insurance escalation: P&C insurer PPI y/y − core CPI y/y (FRED PCU524126524126, CPILFESL) | M | Public | Percentile; premiums outrunning general inflation = catastrophe-driven repricing |
| Property insurance CPI | BLS CPI tenants' & household insurance — FRED CUUR0000SEHD, y/y (property-insurance cost read) | M | Public | Percentile |
| Property premium momentum | BLS CPI tenants' & household insurance — FRED CUUR0000SEHD, 3m annualized (renewal-cycle momentum) | M | Public | Percentile |
| Employee health premium | BLS PPI direct health & medical insurance carriers — FRED PCU524114524114, y/y (employee benefit cost) | M | Public | Percentile |
| Liability / legal cost | BLS PPI offices of lawyers — FRED PCU541110541110, y/y (professional-liability / litigation cost proxy; target is sector-specific liability severity data) | M | Proxy | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Construction materials PPI | BLS PPI construction materials special index — FRED WPUSI012011, y/y | M | Public | Percentile |
| Residential input costs | BLS PPI net inputs to residential construction — FRED WPUIP2311001, y/y | M | Public | Percentile |
| Lumber | BLS PPI lumber — FRED WPU081, y/y | M | Public | Percentile |
| Steel mill products | BLS PPI steel mill products — FRED WPU1017, y/y | M | Public | Percentile |
| Concrete products | BLS PPI concrete products — FRED WPU1332, y/y | M | Public | Percentile |
| Diesel fuel | BLS PPI No. 2 diesel fuel — FRED WPU057303, y/y (materials logistics & fleet cost) | M | Public | Percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Occupancy, primary markets | NIC MAP Vision primary-market occupancy (licensed target); Census/HUD residential vacancy for structures 5+ units (FRED RRVRUSQ156N) running as proxy | Q | Licensed | Inverted percentile: falling occupancy = stress |
| Net absorption (4q, % stock) | NIC MAP Vision net absorption as % of inventory (licensed target); trailing-4q change in occupied stock derived from the occupancy proxy running as interim | Q | Licensed | Inverted percentile |
| Inventory growth (4q, % stock) | NIC MAP Vision inventory growth (licensed target); Census multifamily completions — FRED COMPU5MUSA, trailing 12m y/y — running as proxy | Q / M | Proxy | Percentile: supply growth ahead of absorption = stress |
| Under construction / stock | NIC MAP Vision units under construction ÷ inventory (licensed target); Census multifamily units under construction ÷ total housing stock — FRED UNDCON5MUSA ÷ ETOTALUSQ176N — as proxy | Q / M | Proxy | Percentile |
| 80+ population growth | Census population estimates & projections, age 80+ (NC-EST vintage tables); US population share aged 65+ — FRED SPPOP65UPTOZSUSA, y/y — running as proxy | A | Public | Inverted percentile: faster cohort growth = demand support |
| Penetration rate | Census ACS one-year table B09020 via the ACS API: population 65+ in group quarters ÷ population 65+, interpolated to month-ends (NIC MAP occupied units ÷ age-qualified households remains the licensed target) | A | Proxy | Two-sided vs 10-year window |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| Operator EBITDARM coverage | Operator EBITDARM coverage — (operating income + D&A + rent) ÷ (rent + interest) for Brookdale, Ensign and Pennant — built from SEC XBRL company facts; quarters without tagged rent fall back to landlord EBITDA-to-interest coverage across Welltower, Ventas, Omega, Sabra, CareTrust, NHI | Q | Public | Inverted percentile: falling coverage = stress |
| Agency-labor share of hours | NIC/operator surveys on agency-labor share of hours (licensed target); BLS temporary-help services employment ÷ health care & social assistance employment — FRED CES6056130001 ÷ CES6562000101 — running as proxy | M / Q | Proxy | Percentile |
| Operator bankruptcy filings (12m) | CourtListener RECAP federal bankruptcy dockets: Chapter 11 petitions by senior housing / skilled nursing debtors, by calendar quarter, summed over the trailing four quarters (EDGAR disclosure counts stand in where a quarter's docket search fails) | Q | Public | Percentile |
| Lease & loan transitions (12m) | EDGAR full-text search of healthcare-REIT landlord 8-K / 10-Q / 10-K filings for master-lease transition, new-operator and re-tenanting disclosures, by calendar quarter, trailing four quarters | Q | Public | Percentile |
| Receivable days outstanding | CMS cost-report receivable aging (licensed panel target); days sales outstanding — receivables ÷ quarterly revenue × 91.25 for Brookdale, Ensign and Pennant — built from SEC XBRL company facts, running as proxy | Q | Proxy | Percentile |
| Skilled-nursing operating margin | MedPAC March Report to the Congress, skilled nursing facility services chapter — freestanding-SNF all-payer total margin; the chapter PDF is fetched from medpac.gov, the margin table parsed, and each year interpolated to month-ends | A | Public | Inverted percentile |
| Indicator | Source / series | Freq | Access | Normalization & notes |
|---|---|---|---|---|
| GDPNow current-quarter estimate | Federal Reserve Bank of Atlanta GDPNow — current-quarter real GDP growth estimate, FRED GDPNOW | W (~2×/week) | Public | Inverted z-logistic: falling nowcast = stress |
| GDPNow revision (1 mo) | Atlanta Fed GDPNow — change in the current-quarter estimate over the trailing eight published updates (~1 month) — FRED GDPNOW, computed | W (~2×/week) | Public | Inverted z-logistic: downward revisions = stress |
| Nowcast vs last published GDP | GDPNow estimate less the latest published real GDP growth rate — FRED GDPNOW and GDPC1 (quarter-over-quarter annualized), computed | W (~2×/week) | Public | Two-sided z-logistic around zero: a wide gap in either direction is regime information |
| Weekly Economic Index | Weekly Economic Index (Lewis–Mertens–Stock), Dallas Fed — FRED WEI | W | Public | Inverted z-logistic |
| National activity index (3m avg) | Chicago Fed National Activity Index, three-month moving average — FRED CFNAIMA3 | M | Public | Inverted z-logistic; −0.70 is the historical recession threshold |
| Realized real GDP growth | BEA real gross domestic product, quarter-over-quarter annualized — FRED GDPC1, computed | Q | Public | Inverted percentile: the published print the nowcast is anchored to |
Methodology (§2, §4.3, §5, §8, §9, §10)
Each raw series maps to a 0–100 stress score, oriented so higher always means more stress. Percentile: rank of the current value within a rolling 10-year window (5-year minimum), for bounded or slow-moving series. z-logistic: a z-score against the same window, winsorized at ±3σ, mapped logistically to 0–100, for spread and volatility series with fat tails. Pillar score is the equal-weighted mean of its six indicators in version one; within-pillar weight exceptions are a calibration item deferred to the first backtest pass.
- Composite
- C = Σ wᵢ·Sᵢ / Σ wᵢ — the divisor makes the composite invariant to weight rescaling, so only proportions matter.
- Publication
- Daily at 06:00 CT. Lower-frequency series carry forward at their last value.
- Staleness
- Past 1.5× native frequency without an update, within-pillar weight decays linearly to 50% over one further period and the indicator is flagged stale on every surface.
- Smoothing
- Daily market series pass a 3-day median filter; event and survey series are never smoothed.
- Point-in-time
- Published history is never back-revised. Inputs are stored as vintages (ALFRED where available, internal vintage store elsewhere); a separately labeled revised history exists for research only.
Bands: Calm 0–25, Watch 25–45, Elevated 45–65, Stress 65–80, Crisis 80–100. A regime change publishes only when confirmed — three consecutive daily closes inside the new band, or a single close at least 2.0 points beyond the boundary. This prevents band-flapping and stops the decision layer from triggering and standing down on noise.
- Weights
- The platform ships with the §4.2 defaults; the interface exposes them for scenario work, and the published composite uses only the ratified set.
Each analog is an episode defined by an anchor month, a trigger narrative, and an outcome window. Authored vectors are replaced in production by computed vectors: the full §2 pipeline runs on point-in-time history as of the anchor date, so an analog's eight-pillar vector comes from the same machine that scores today. Library changes require a written definition, the computed vector, and CEO sign-off; the library is versioned and every change logged.
- Similarity
- Sim = max(0, 100 − k·√( Σ ŵᵢ·(vᵢ − sᵢ)² )), k = 1.6 — a weighted-distance rhyme score, not a forecast.
- Disclosure standard
- Four mandatory fields per analog: what rhymes, what differs, what happened next, and how senior housing & care behaved. An analog without a sector read is not publishable.
05:45 CT data cut → compute and change detection → 06:00 render → 06:15 human review gate → 06:30 distribution. The brief is exactly one page every day, including days when nothing happened — absence of change is itself reported.
- Change detection
- An item qualifies only on a pillar 7-day move ≥ 1.5 pts, a regime-band change on any pillar or the composite, a change in the #1 analog, or a probability-row move ≥ 5 pts at any horizon. Top three by magnitude render.
- Template contract
- Fixed order: header metrics, lede, What changed, Why it matters, What it means for senior housing & care (Capital / Operations / Strategy), Watch. Every What-changed item carries a pillar, a magnitude, and a transmission clause.
- Review gate
- A named editor of record, 15-minute window, exactly two powers: correct factual errors or hold distribution. The gate cannot rewrite analysis.
A monthly walk-forward from January 2006 through December 2025 on vintage data only. Two validation cases are pre-registered before the run: September 2019 (repo stress — did P4 and P8 lead the event?) and February–March 2023 (regional banks — what lead time did P4 give before the first failure?).
- Lead time
- Composite enters Stress before the acute phase in at least 4 of the 6 reference dislocations (2007–08, 2011, 2018, 2020, 2022, 2023).
- False-alarm rate
- No more than 40% of confirmed Stress entries fail to be followed by a defined stress event within 180 days.
- Probability skill
- Published-methodology probabilities beat climatological base rates on Brier score across the walk-forward at the 6m and 12m decision horizons; the 3m row is disclosed as diagnostic.
- Analog sanity
- For each reference dislocation, the #1 computed analog at the time is judged defensible on review.
- Gate
- The Demonstration label does not come off until all four criteria pass and the result is accepted in writing.
Every feed carries Demonstration or Live status; the composite displays Partial-Live with a fraction until every feed is live and §9 has passed. No surface may display a live-looking number from a demonstration feed without the label.
- Licensing
- Every Licensed and Proxy row has an owner and a due date; redistribution terms are a counsel item before the brief circulates beyond the company.
- Change control
- Any change to a formula, weight, map, threshold, or the analog library requires a written proposal, a side-by-side impact run on the trailing 24 months, and CEO sign-off with a recorded effective date.
- Language
- Vocabulary is probabilities, analogs, regimes, and rhymes. Forecast language is prohibited; every distributed surface carries its status label and “not investment, legal, or accounting advice.”
Open items (§12)
| Item | Owner | Due |
|---|---|---|
| License quotes: ICE (MOVE), S&P Global (CDS, distress ratio), Morningstar LSTA, Capital IQ; confirm redistribution terms if the brief circulates externally | Engineering + Counsel | Sep 12, 2026 |
| When-issued yield vendor for true auction tails (retires the Proxy tag on P1-2) | Engineering | Sep 19, 2026 |
| Name the editor of record for the 06:15 CT review gate (§8.3) | CEO | Sep 5, 2026 |
| Counsel review of the distributed daily brief | Counsel | Sep 19, 2026 |
| Confirm point-in-time vintage coverage for all 48 series (ALFRED where available; internal vintage store elsewhere) | Engineering | Sep 26, 2026 |
| Ratify default pillar weights (§4.2) and the scaling constant k = 1.6 (§5.2) after the first backtest pass | CEO | Oct 2, 2026 |
| Ratify the threshold-to-action table (§7) — pre-commitments bind only once ratified | CEO / Board | Oct 2, 2026 |
The §9 backtest gate is the block between a partial-live demonstration and activation. Wiring live feeds does not open it: the criteria are judged on an executed walk-forward over point-in-time vintages, and the result must be accepted in writing.
Why the gate is still closed — the remaining path
| Step | What is required | Where | Status |
|---|---|---|---|
| 1 · Criteria pass | All four §9 criteria pass on the selected run, after any reviewer §9.4 sign-offs. | Run the walk-forward below. | Outstanding |
| 2 · As-published PIT depth | As-published months for each macro pillar (P1–P8) up to 240, rebased to the archive's own inception where the full window cannot exist (floor 96 months, labelled history-limited). | 12 Vintage store → Backfill as-published PIT (auto-continues in 24-month chunks). | Outstanding |
| 3 · Point-in-time run | A §9 run whose basis is the as-published ledger, not the current provider vintage. | Set the run mode below to point-in-time and re-run. | Outstanding |
| 4 · Written activation acceptance | A signed activation-ready acceptance against that point-in-time run. | Acceptance ledger at the bottom of this tab. | Outstanding |
Data readiness — prerequisites to launch the run
| Ref | Check | Requirement | Status |
|---|---|---|---|
| §10 | Feed coverage | All 106 registered indicators on live feeds | Fail0/106 live — 106 still demonstration (26 proxy, 2 licensed pending). |
| §2 | Staleness | No live indicator past 1.5× its native publication frequency | PassAll 0 live series inside their publication window. |
| §2 | Point-in-time history — macro core | 240 months of vintage inputs (Jan 2006 – Dec 2025) for P1–P8, rebased per pillar where the archive itself begins later | FailShort: Treasury & Sovereign Risk (0/240 mo), Credit Markets (0/98 mo), Consumer Stress (0/240 mo), Banking & Liquidity (0/220 mo), Corporate Health (0/97 mo), Inflation & Policy (0/240 mo), Global Shocks (0/188 mo), Market Structure (0/240 mo) (0 as-published vintages on file). |
| §2 / §9 | Point-in-time history — sector pillars | 60 months of vintage inputs for each of P9–P12 before their readings may arm | FailNot ready: Labor & Care Workforce (0/60 mo), Housing & Wealth Transfer (0/60 mo), Reimbursement & Regulatory (0/60 mo), Sector Capital Markets (0/60 mo), Insurance & Liability Cost (0/60 mo), Construction Inputs & Development Cost (0/60 mo), Demand & Supply Balance (0/60 mo), Operator & Counterparty Health (0/60 mo). P9–P12 were added after the store opened, so their vintages start at the first capture that contained them. |
| §9 | Pre-registered cases | Both validation cases registered in writing before the run | PassSep 2019 — repo stress · Feb–Mar 2023 — regional banks registered. |
Point-in-time readiness by pillar (§9 PIT gate)
§9 is judged only on as-published vintages. The macro core (P1–P8) needs the full 240-month walk-forward window; the sector pillars (P9–P12) were added after the store opened, so each needs 60 as-published months of its own before its readings may bind an action. A trigger arms only when every pillar it reads is ready — which for composite triggers means all seventeen. Reading the vintage store…
| Pillar | Basis | As-published months | Window | Status |
|---|---|---|---|---|
| Treasury & Sovereign Risk | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Credit Markets | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Consumer Stress | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Banking & Liquidity | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Corporate Health | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Inflation & Policy | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Global Shocks | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Market Structure | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Labor & Care Workforce | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Housing & Wealth Transfer | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Reimbursement & Regulatory | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Sector Capital Markets | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Insurance & Liability Cost | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Construction Inputs & Development Cost | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Demand & Supply Balance | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Operator & Counterparty Health | Sector (P9–P12) | … | … | Reading…Vintage store query in flight — readiness withheld. |
| Growth Nowcast (GDPNow) | Macro core (P1–P8) | … | … | Reading…Vintage store query in flight — readiness withheld. |
Trigger arming under PIT readiness (§7)
| Trigger | Pillar basis | Arming state |
|---|---|---|
| Composite enters Stress (≥ 65.0, confirmed per §4.3) | Composite — all 12 pillars | Reading…Vintage store query in flight — arming verdict withheld. |
| Fed-cut probability (90d row) ≥ 50% | Inflation & Policy | Reading…Vintage store query in flight — arming verdict withheld. |
| 10Y close > 5.25% for 5 sessions | Treasury & Sovereign Risk | Reading…Vintage store query in flight — arming verdict withheld. |
| HY OAS ≥ 450 bp for 5 sessions | Credit Markets | Reading…Vintage store query in flight — arming verdict withheld. |
| Core PCE 3m annualized ≥ 3.5% for 2 prints | Inflation & Policy | Reading…Vintage store query in flight — arming verdict withheld. |
| P4 Banking & Liquidity ≥ 65.0 | Banking & Liquidity | Reading…Vintage store query in flight — arming verdict withheld. |
| P3 Consumer Stress ≥ 65.0 | Consumer Stress | Reading…Vintage store query in flight — arming verdict withheld. |
| Composite returns to Watch (< 45.0, confirmed) | Composite — all 12 pillars | Reading…Vintage store query in flight — arming verdict withheld. |
§9 criteria — all four must pass
| Ref | Criterion | Requirement | Status |
|---|---|---|---|
| §9.1 | Lead time | Composite enters Stress before the acute phase in ≥ 4 of the 6 reference dislocations | Not runNo walk-forward executed — criterion cannot be evaluated. |
| §9.2 | False-alarm rate | ≤ 40% of confirmed Stress entries unfollowed by a defined stress event within 180 days | Not runNo walk-forward executed — criterion cannot be evaluated. |
| §9.3 | Probability calibration | Published-methodology probabilities are non-inferior to climatological base rates on out-of-sample Brier score at the decision horizons (6m and 12m), within a 1% tolerance, with out-of-sample discrimination disclosed; 3m is diagnostic (§9.3 as amended, §10 change control 2026-08-26) | Not runNo walk-forward executed — criterion cannot be evaluated. |
| §9.4 | Analog sanity | For each reference dislocation, the #1 computed analog is judged defensible on review | Not runNo walk-forward executed — criterion cannot be evaluated. |
Walk-forward run
Gated actions
Publish the composite as Live rather than Partial-Live.
Let threshold triggers bind capital, operations, and strategy actions.
Circulate the 06:30 CT brief beyond the company.
Expose the index to external decision-makers as a live product.
Pre-registered validation cases
| Case | Pre-registered question |
|---|---|
| Sep 2019 — repo stress | Did P4 (Banking & liquidity) and P8 (Market structure) lead the event? |
| Feb–Mar 2023 — regional banks | What lead time did P4 give before the first failure? |
Reference dislocations for §9.1 and §9.4: 2007–08 · 2011 · 2018 · 2020 · 2022 · 2023. Criteria are evaluated only against an executed walk-forward on point-in-time vintages — never against the current live readings, which is why live data alone cannot open this gate.
Per-indicator feed health: the source behind each of the 49 register rows, the latest observation it returned, the time of the last successful fetch, and the verbatim error for anything that failed. Rows without a connected feed run on demonstration data (§10).
Connecting to live feeds…
Status rows appear once the first fetch cycle lands. Until then every register row would read “Not connected” — that is a loading state, not a finding about the sources.
Indicator-level attribution: how each of the 49 register rows — including the new foreign 10Y impulse (JGB/Bund/Gilt) in Global Shocks — turns into points of today’s headline index. Contribution is the indicator’s stress score times its slice of the weighting scheme, so the rows sum exactly to the composite and move with the weight sliders.
| Indicator | Latest reading | Stress score | Δ7d | Max share | Contribution | Share of index |
|---|---|---|---|---|---|---|
| Geopolitical risk indexdemo | 148 | 63.0 | +2.4 | 0.46% | 0.29 | |
| Oil volatility (OVX)demo | 41 | 63.0 | +2.4 | 0.46% | 0.29 | |
| Freight stress compositedemo | 1.7σ | 63.0 | +2.4 | 0.46% | 0.29 | |
| EM FX pressuredemo | 1.4σ | 63.0 | +2.4 | 0.46% | 0.29 | |
| China credit impulsedemo | −1.8% GDP | 63.0 | +2.4 | 0.46% | 0.29 | |
| JPY carry stressdemo | 1.6σ | 63.0 | +2.4 | 0.46% | 0.29 | |
| Foreign 10Y impulse (JGB/Bund/Gilt)demo | +0.18 pp 3m | 63.0 | +2.4 | 0.46% | 0.29 | |
| JGB 10Y leveldemo | 1.72% | 63.0 | +2.4 | 0.46% | 0.29 | |
| Gilt long-end leveldemo | 4.86% | 63.0 | +2.4 | 0.46% | 0.29 | |
| Global sovereign yield compositedemo | 3.24% | 63.0 | +2.4 | 0.46% | 0.29 | |
| Global Shocks subtotal | Contribution = stress score × pillar weight ÷ (indicators in pillar × total weight) | 2.91 | 5.3% of 55.4 | |||
Transmission Feeds through energy, insurance, and construction input costs — and pushes global capital toward defensive, needs-based real assets.
Substitution disclosure: nine register rows run a public proxy in place of a licensed vendor series. This panel names each licensed target, states what is computed instead, and reports a measured co-movement test against an independent public reference — correlation of monthly score changes, same-direction hit rate, and any persistent level bias — so the substitution is quantified rather than assumed.
No licensed print is available inside this deployment, so nothing here claims a measured error against the vendor series. Each proxy is instead tested against an independent public reference that the licensed target is known to track: if the proxy carries the same stress signal, its month-over-month score changes should move with that reference. Correlations are computed from the reconstructed 24-month history — a low reading is a genuine flag on the substitution, not a display artifact.
Automated sign-convention resolution. A proxy such as the leveraged-loan default stand-in can carry its reference's signal with the opposite sign purely because of how the underlying series is normalised. Every pair is therefore orientation-tested before grading: the Δ-correlation is measured raw, then again on the earlier and later half of the overlap. When the negative reading is material on the full sample and present in both halves, it is a convention difference, not noise — the reference is reflected about its own mean and every statistic in the row (Δ corr, same-direction, RMS gap, bias, grade) is recomputed in the corrected direction, tagged flip applied. A negative reading that does not repeat across both halves is left unflipped and still grades as Inverted, because a sign that is not stable cannot honestly be resolved away.
| Register row | Licensed target · vendor | Public reference | Obs | Sign | Δ corr | Level corr | Same-direction | RMS gap | Bias | Grade |
|---|---|---|---|---|---|---|---|---|---|---|
| USA 5Y CDSTreasury & Sovereign Risk | USA 5Y sovereign CDS spreadS&P Global (Markit) | SOFR − IORB spread | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| Distress ratio (HY)Credit Markets | Distress ratio (share of HY trading >1000 bp)S&P Global / LCD | HY OAS | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| Lev-loan default rateCredit Markets | Leveraged-loan default rate (issuer-weighted)Morningstar LSTA US Leveraged Loan Index | Card 90d+ delinquency | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| MOVE indexTreasury & Sovereign Risk | MOVE index (implied Treasury volatility)ICE BofA | VIX term structure | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| Futures order-book depthMarket Structure | Treasury futures order-book depth (market-by-price)CME Group | VIX term structure | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| Median interest coverageCorporate Health | Interest-coverage ratio distribution (issuer level)S&P Capital IQ / Compustat | Corporate margin trend | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| Zombie-firm shareCorporate Health | Zombie-firm share (ICR < 1 for three years)Licensed fundamentals screen | Ch.11 filings pace | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| JPY carry stressGlobal Shocks | USDJPY implied volatilityBank dealer / options vendor | Oil volatility (OVX) | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
| Avg auction tail (6 auc.)Treasury & Sovereign Risk | Auction tail vs 1:00 pm when-issued quoteDealer WI quote feed | 10Y term premium | 0 | +1 not tested | — | — | — | — | — | Unmeasured |
Reading the columns. Sign is the outcome of the orientation test: +1 as published keeps the register convention, −1 flip applied means a stable opposite sign was resolved and every statistic in that row is stated in the corrected direction, and unresolved means the negative reading was not stable enough to flip. Δ corr is the correlation of month-over-month score changes after resolution — the strongest available evidence that the proxy tracks the signal; the raw pre-flip value is shown beneath it when a flip was applied. Same-direction is the share of months both series moved the same way. RMS gap and Bias compare score levels: a large positive bias means the proxy persistently reads hotter than its reference, which is the substitution risk to disclose when the index sits near a §7 trigger. An Inverted grade now means only one thing — the proxy moves against its reference and the direction convention could not be resolved automatically, so that row should not support a §7 trigger yet.
Versioned methodology changelog
Every recomputation above can be committed to an append-only ledger. The server fingerprints the substitution register — each row's licensed target, vendor, the proxy actually computed, its rationale and known divergence, and the independent public reference — together with the grading constants. An unchanged fingerprint records the run under the existing version; any edit to a proxy or a reference mints a new version with a machine-derived change list, so a substitution can never move silently between two published fidelity tables. Runs sharing a version but differing in metrics are a data restatement; runs on different versions are a methodology change.
Version ledger
No methodology version recorded yet. Recording the current recomputation mints v1 and fixes today's proxy/reference mapping as the audit baseline.
Recomputation log
Point-in-time vintage store: an append-only ledger of exactly what the index, the eight pillars, every indicator print and every §7 trigger said on each publication date. Records are content-addressed with a SHA-256 digest and cannot be edited or deleted, so a §9 walk-forward is judged on the readings as published — not on data since restated upstream.
| Publication date | Rev | Captured | Composite | Band | Live feeds | Rows stored | Digest | Note | |
|---|---|---|---|---|---|---|---|---|---|
| Reading the vintage ledger… | |||||||||
Ask the index in plain language. The assistant reads the same published snapshot every other tab renders — all 106 indicator prints with sources and staleness, the seventeen pillars, the 24-month history, §6 probabilities, §7 triggers, the §9 gate and §11 proxy fidelity — and is instructed to cite only figures present in that reading. Nothing is stored: the conversation lives in this page only.
Ask the index
Questions are answered from today’s published reading: every pillar, all 106 indicator prints with their sources and staleness, the 24-month history, the §6 probability stack, §7 triggers, the §9 gate, §11 proxy fidelity, and the §10 diagnostics log of persisted sector-series probe runs — provider endpoint, last print, staleness verdict and conversion chain per series. The assistant will not produce a figure that is not in the reading. This conversation is not stored — a reload starts fresh.
Answers are generated from the published reading and can contain errors of interpretation — verify any figure against its tab before acting. Not investment, legal, or accounting advice.
A market-level underwriting test in two modes. Acquisition runs a full REIT-grade model on an existing asset — occupancy ramp, rate versus cost growth, an escalated capex reserve, sized debt, a year-by-year cash flow, unlevered and levered IRR, equity multiple, break-even occupancy, and the cost-of-capital tests a public buyer answers to: spread to WACC, first-year FFO accretion and the NAV test at the buyer’s own implied cap. Development grades a ground-up basis — escalation, contingency and yield on cost. Pricing, credit and return requirements are checked against P12 Sector Capital Markets; revenue and expense growth against P9 Labor & Care Workforce and P13 Insurance & Liability Cost; basis, replacement cost and capex against P14 Construction Inputs & Development Cost. Requirement tables tighten as those pillars move band, and each verdict opens to the source series it was measured on.
Assumptions are graded against the national live feeds with no state adjustment. Pick a state to shift the requirement tables and the market read onto that state’s cost, catastrophe and demand profile.
Proceed with conditions at $235,000/unit · $28,200,000 total — the price is supportable, but 4 assumptions ahead of the live market have to be underwritten out.
4 assumptions ahead of the live market. Supportable range $216,540–$291,863 per unit (midpoint $246,353). Your price is 5% below the midpoint.
Sample valuesCap rate, NOI, debt service and equity are all market-seeded sample values — treat this range as indicative until the deal's own figures are entered above.
- Current income supports $230,657/unit at the 6.85% going-in yield this market clears at.
- Replacement cost implies $291,863/unit — 10% below the $324,293/unit it costs to build today.
- Stabilization discounted back at the 13.5% required return is worth $216,540/unit.
- Going-in cap rate vs. live benchmark: 6.62% against 6.85% required (benchmark 6.40% + 45 bp Elevated risk premium).
- Senior mortgage coupon: 6.85% against 8.40% implied (benchmark + 200 bp Elevated spread).
- Exit cap rate: 6.75% against 8.02% minimum (going-in 6.62% + 20 bp/yr × 7).
| Driver | Value / unit | Basis |
|---|---|---|
| Current income | $230,657 | T-12 NOI at the 6.85% required going-in yield |
| Replacement cost | $291,863 | 10% below the $324,293/unit cost to build today |
| Stabilization | $216,540 | Stabilized NOI discounted back at the 13.5% required return |
| Supportable range | $216,540 – $291,863 | Midpoint $246,353 |
This deal’s own numbers0/7 stated
Every other input on this page is a ratio. A closing is not: the purchase and sale agreement states a price, the trailing-twelve statement states revenue and expenses, the term sheet states proceeds and a payment, and the sources and uses states the equity wire. Enter those seven figures and the going-in cap rate, NOI, debt service and equity below are the deal’s rather than the market’s. Anything left blank stays on the live market seed and is named as such in the verdict.
Stated figures
What the model reads from them
Nothing stated yet — the graded run is on market-seeded sample values. Enter the price and the trailing-twelve revenue and expense lines first; those two produce the cap rate and NOI the whole verdict rests on.
Read a deal package
Upload the offering memorandum, rent roll, T-12 or lender term sheet (PDF, Excel, CSV — up to four files, 15 MB each). Every proposed number keeps the line it was read from, and nothing is written into your assumptions until you apply it. Low-confidence or unsourced reads are held back until you confirm the row.
Rent roll & resident censusno roll ingested
Every other panel underwrites the property average. Diligence starts one level below it: unit-by-unit in-place rent against market rent, payer and level of care by resident, length of stay, and the vacancy that is rentable rather than down. Paste a roll or upload the operator’s file — the reconciliation below shows where the roll and the graded model disagree.
Ingest
Payer profile
Part private, part government. Every payer surface is shown so the government share can be sized and stressed.
Care type
Grading is sector-wide, but the economics are not. Load a care-realistic starting point — rate growth, opex ratio, insurance share, capex and cap rates — then edit any field. Skilled nursing prices per licensed bed.
Operator & quality scorecard60/100 · Watch · 2 tests fail
Skilled-nursing deals are rarely lost on the cap rate — they are lost on the operator. Survey history, staffing against the mandate, case mix against the rate assumption and the state’s Medicaid rate-setting method are the inputs that actually kill deals. The score below converts them into explicit overlays on the graded assumption set rather than leaving them as commentary.
CMS ratings & survey history
Staffing & operator depth
Acuity & market position
Medicaid rate mechanics
| Driver | Reading | Points | Why it moves the underwriting |
|---|---|---|---|
| CMS star profile | 2.92 weighted (overall 3★, survey 2★) | +19.2 | Survey and staffing carry the most weight: they drive referral-source behaviour and liability pricing, not just the public score. |
| Survey / deficiency history | 9 deficiencies, 0 immediate jeopardy | +9.0 | Deficiency count above the four-citation norm signals process risk that shows up first in agency labour. |
| Staffing vs mandate | 3.50 HPRD vs 3.48 mandate · RN 0.62 | +12.5 | Staffing clears the mandate, so the expense ratio does not need a compliance catch-up. |
| Nurse turnover | 48% | +8.2 | Turnover above the low-40s is the single best predictor of agency spend and of the next survey outcome. |
| Case mix & occupancy vs state | CMI 1.15 vs 1.12 · occupancy +1.5 pp | +1.6 | Case mix supports the rate assumption under PDPM; occupancy above the state read means the building is a referral winner. |
| Medicaid rate setting | case-mix · pending flat | +6.0 | Cost-based and case-mix methods reprice with the operator's own cost curve; price-based methods do not. |
| Operator depth | 6 yrs at this asset · 12 other buildings | +3.0 | Tenure and regional density decide whether a replacement operator exists if the lease has to be re-cut. |
| Total | Watch | 60 | 0–100; the institutional line is 78 and the watch line 62. |
| Test | Result | Detail |
|---|---|---|
| Staffing clears the mandate | pass | 3.50 HPRD vs 3.48 required — 0.02 of headroom. |
| No immediate jeopardy in three years | pass | Clean of immediate jeopardy citations. |
| Survey rating at or above 3★ | fail | Health inspection 2★ — referral sources screen on this before rate. |
| Case mix supports the rate assumption | pass | CMI 1.15 against the 1.12 state read; 4.00%/yr of rate growth is underwritten. |
| No pending Medicaid reduction | pass | Rate setting is case-mix, pending action flat. |
| Turnover at or below 45% | fail | 48% total nurse turnover. |
Scenario compare — care types
Same deal, same live feed, same tolerance rule (1.00× model width · conservative at 4.0× slack) and state basis (US). Only the care-type economics change, so the spread between columns is the care premium or discount.
| Metric | Independent LivingLowest care load: thin opex ratio, low capex per unit, rate growth tracks CPI-plus. | Assisted LivingBalanced needs-based model — the platform default. | Memory CareHigh staffing ratios and secured design: heavier opex and insurance share, richer RevPOR. | Skilled NursingReimbursement-led revenue, labor-dominated cost base and professional-liability exposure: opex ratio near 83%, per-bed pricing, wider exit cap. |
|---|---|---|---|---|
| Verdict tally | ||||
| Flagged (aggressive) | 8 | 4 | 3 | 4 |
| Consistent | 2 | 7 | 7 | 3 |
| Conservative | 5 | 4 | 5 | 8 |
| Headline outputs | ||||
| All-in basis / unit | $248,675 | $238,525 | $258,825 | $111,650 ★ |
| Going-in cap (T-12) | 6.64% | 6.62% | 6.76% | 12.09% ★ |
| Stabilized yield on cost | 8.15% | 9.09% | 9.81% | 15.36% ★ |
| Levered IRR | 19.2% | 22.1% | 24.5% ★ | 8.5% |
| Unlevered IRR | 12.9% | 14.4% | 15.8% ★ | 7.8% |
| Equity multiple | 3.00× | 3.44× | 3.85× ★ | 1.42× |
| Avg. cash-on-cash | 8.5% | 10.5% | 12.3% | 14.7% ★ |
| Year-one DSCR | 1.73× | 1.80× | 1.87× | 3.26× ★ |
| Year-one debt yield | 11.86% | 12.33% | 12.84% | 23.96% ★ |
| Break-even occupancy | 76.0% | 76.3% | 76.8% | 74.3% ★ |
| Equity required | $11.94M | $11.45M | $12.42M | $6.03M ★ |
| NOI CAGR over hold | 5.0% | 7.2% | 8.4% ★ | -2.9% |
| Cap − WACC spread | +0.30 pp | +0.58 pp | +0.89 pp | +6.36 pp ★ |
| Census constraint — Lock total bed-days, ±5 pp sweep | ||||
| Coverage at current mix | 4.79× | 3.78× | 2.73× | 3.16× |
| Covenant minimum | 1.30× | 1.30× | 1.30× | 1.30× |
| Census held fixed at | 26.0% private pay | 26.0% private pay | 26.0% private pay | 26.0% private pay |
| Days open to the swept payers | 74.0% | 74.0% | 74.0% | 74.0% |
| Feasible skilled share | 18.0% – 38.0% | 18.0% – 38.0% | 18.0% – 38.0% | 18.0% – 38.0% |
| Feasible Medicare Part A | 7.7% – 16.3% | 7.7% – 16.3% | 7.7% – 16.3% | 7.7% – 16.3% |
| Feasible managed care | 10.3% – 21.7% | 10.3% – 21.7% | 10.3% – 21.7% | 10.3% – 21.7% |
| Feasible Medicaid share | 36.0% – 56.0% | 36.0% – 56.0% | 36.0% – 56.0% | 36.0% – 56.0% |
| Usable grid cells | 25 | 25 | 25 | 25 |
| Trimmed cells | 10 | 10 | 10 | 10 |
| Infeasible cells | 0 | 0 | 0 | 0 |
| Cells breaching coverage | 0 | 0 | 0 | 0 |
| Best coverage in grid | 5.14× | 4.06× | 2.93× | 3.40× |
| Best coverage at | 36.0% Medicaid / 38.0% skilled | 36.0% Medicaid / 38.0% skilled | 36.0% Medicaid / 38.0% skilled | 36.0% Medicaid / 38.0% skilled |
| Graded assumptions (15) | ||||
| Going-in cap rate vs. live benchmark | Independent Living: flagged as aggressive | Assisted Living: flagged as aggressive | Memory Care: consistent with the market read | Skilled Nursing: conservative versus the market read |
| Senior mortgage coupon | Independent Living: flagged as aggressive | Assisted Living: flagged as aggressive | Memory Care: flagged as aggressive | Skilled Nursing: flagged as aggressive |
| Leverage (loan to value) | Independent Living: consistent with the market read | Assisted Living: consistent with the market read | Memory Care: consistent with the market read | Skilled Nursing: consistent with the market read |
| Year-one coverage and debt yield | Independent Living: conservative versus the market read | Assisted Living: conservative versus the market read | Memory Care: conservative versus the market read | Skilled Nursing: conservative versus the market read |
| Exit cap rate | Independent Living: flagged as aggressive | Assisted Living: flagged as aggressive | Memory Care: flagged as aggressive | Skilled Nursing: flagged as aggressive |
| Levered IRR vs. required return | Independent Living: conservative versus the market read | Assisted Living: conservative versus the market read | Memory Care: conservative versus the market read | Skilled Nursing: flagged as aggressive |
| Spread to buyer's weighted cost of capital | Independent Living: flagged as aggressive | Assisted Living: flagged as aggressive | Memory Care: flagged as aggressive | Skilled Nursing: conservative versus the market read |
| FFO accretion / dilution (year one) | Independent Living: flagged as aggressive | Assisted Living: consistent with the market read | Memory Care: conservative versus the market read | Skilled Nursing: conservative versus the market read |
| NAV test (basis vs. implied-cap value) | Independent Living: conservative versus the market read | Assisted Living: conservative versus the market read | Memory Care: conservative versus the market read | Skilled Nursing: conservative versus the market read |
| Operating expense growth (ex-insurance) | Independent Living: flagged as aggressive | Assisted Living: consistent with the market read | Memory Care: consistent with the market read | Skilled Nursing: consistent with the market read |
| Insurance & liability line growth | Independent Living: consistent with the market read | Assisted Living: consistent with the market read | Memory Care: consistent with the market read | Skilled Nursing: conservative versus the market read |
| Rate growth vs. cost growth (margin path) | Independent Living: flagged as aggressive | Assisted Living: consistent with the market read | Memory Care: consistent with the market read | Skilled Nursing: flagged as aggressive |
| Basis vs. live replacement cost | Independent Living: conservative versus the market read | Assisted Living: conservative versus the market read | Memory Care: conservative versus the market read | Skilled Nursing: conservative versus the market read |
| Recurring capex reserve | Independent Living: flagged as aggressive | Assisted Living: consistent with the market read | Memory Care: consistent with the market read | Skilled Nursing: conservative versus the market read |
| Break-even occupancy | Independent Living: conservative versus the market read | Assisted Living: consistent with the market read | Memory Care: consistent with the market read | Skilled Nursing: consistent with the market read |
Feasibility & intensity — EBITDAR coverage
Medicaid × skilled combinations swept under the “Lock total bed-days” constraint, ±5 pp per step. EBITDAR per bed divided by year-one debt service. All grids share one colour scale (2.53× → 5.14×), so a darker cell is a stronger read regardless of the care type.
- weakest in range
- strongest in range
- fails the covenant
- trimmed to fit the census
- infeasible under the constraint
- current mix
| Medicaid ↓ / skilled → | 18.0% | 23.0% | 28.0% | 33.0% | 38.0% |
|---|---|---|---|---|---|
| 36.0% | 4.73× · 36.0% Medicaid · 18.0% skilled · 46.0% private pay | 4.83× · 36.0% Medicaid · 23.0% skilled · 41.0% private pay | 4.93× · 36.0% Medicaid · 28.0% skilled · 36.0% private pay | 5.04× · 36.0% Medicaid · 33.0% skilled · 31.0% private pay | 5.14× · 36.0% Medicaid · 38.0% skilled · 26.0% private pay |
| 41.0% | 4.65× · 41.0% Medicaid · 18.0% skilled · 41.0% private pay | 4.76× · 41.0% Medicaid · 23.0% skilled · 36.0% private pay | 4.86× · 41.0% Medicaid · 28.0% skilled · 31.0% private pay | 4.97× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay | 4.97× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay · trimmed to fit the census |
| 46.0% | 4.58× · 46.0% Medicaid · 18.0% skilled · 36.0% private pay | 4.69× · 46.0% Medicaid · 23.0% skilled · 31.0% private pay | 4.79× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · current mix | 4.79× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix | 4.79× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix |
| 51.0% | 4.51× · 51.0% Medicaid · 18.0% skilled · 31.0% private pay | 4.62× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay | 4.62× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 4.62× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 4.62× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census |
| 56.0% | 4.44× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay | 4.44× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 4.44× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 4.44× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 4.44× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census |
Best coverage 5.14× at 36.0% Medicaid / 38.0% skilled, against a 1.30× covenant.
| Medicaid ↓ / skilled → | 18.0% | 23.0% | 28.0% | 33.0% | 38.0% |
|---|---|---|---|---|---|
| 36.0% | 3.73× · 36.0% Medicaid · 18.0% skilled · 46.0% private pay | 3.81× · 36.0% Medicaid · 23.0% skilled · 41.0% private pay | 3.90× · 36.0% Medicaid · 28.0% skilled · 36.0% private pay | 3.98× · 36.0% Medicaid · 33.0% skilled · 31.0% private pay | 4.06× · 36.0% Medicaid · 38.0% skilled · 26.0% private pay |
| 41.0% | 3.68× · 41.0% Medicaid · 18.0% skilled · 41.0% private pay | 3.76× · 41.0% Medicaid · 23.0% skilled · 36.0% private pay | 3.84× · 41.0% Medicaid · 28.0% skilled · 31.0% private pay | 3.92× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay | 3.92× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay · trimmed to fit the census |
| 46.0% | 3.62× · 46.0% Medicaid · 18.0% skilled · 36.0% private pay | 3.70× · 46.0% Medicaid · 23.0% skilled · 31.0% private pay | 3.78× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · current mix | 3.78× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix | 3.78× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix |
| 51.0% | 3.56× · 51.0% Medicaid · 18.0% skilled · 31.0% private pay | 3.65× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay | 3.65× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 3.65× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 3.65× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census |
| 56.0% | 3.51× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay | 3.51× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 3.51× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 3.51× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 3.51× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census |
Best coverage 4.06× at 36.0% Medicaid / 38.0% skilled, against a 1.30× covenant.
| Medicaid ↓ / skilled → | 18.0% | 23.0% | 28.0% | 33.0% | 38.0% |
|---|---|---|---|---|---|
| 36.0% | 2.70× · 36.0% Medicaid · 18.0% skilled · 46.0% private pay | 2.76× · 36.0% Medicaid · 23.0% skilled · 41.0% private pay | 2.81× · 36.0% Medicaid · 28.0% skilled · 36.0% private pay | 2.87× · 36.0% Medicaid · 33.0% skilled · 31.0% private pay | 2.93× · 36.0% Medicaid · 38.0% skilled · 26.0% private pay |
| 41.0% | 2.66× · 41.0% Medicaid · 18.0% skilled · 41.0% private pay | 2.71× · 41.0% Medicaid · 23.0% skilled · 36.0% private pay | 2.77× · 41.0% Medicaid · 28.0% skilled · 31.0% private pay | 2.83× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay | 2.83× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay · trimmed to fit the census |
| 46.0% | 2.61× · 46.0% Medicaid · 18.0% skilled · 36.0% private pay | 2.67× · 46.0% Medicaid · 23.0% skilled · 31.0% private pay | 2.73× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · current mix | 2.73× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix | 2.73× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix |
| 51.0% | 2.57× · 51.0% Medicaid · 18.0% skilled · 31.0% private pay | 2.63× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay | 2.63× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 2.63× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 2.63× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census |
| 56.0% | 2.53× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay | 2.53× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 2.53× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 2.53× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 2.53× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census |
Best coverage 2.93× at 36.0% Medicaid / 38.0% skilled, against a 1.30× covenant.
| Medicaid ↓ / skilled → | 18.0% | 23.0% | 28.0% | 33.0% | 38.0% |
|---|---|---|---|---|---|
| 36.0% | 3.12× · 36.0% Medicaid · 18.0% skilled · 46.0% private pay | 3.19× · 36.0% Medicaid · 23.0% skilled · 41.0% private pay | 3.26× · 36.0% Medicaid · 28.0% skilled · 36.0% private pay | 3.33× · 36.0% Medicaid · 33.0% skilled · 31.0% private pay | 3.40× · 36.0% Medicaid · 38.0% skilled · 26.0% private pay |
| 41.0% | 3.07× · 41.0% Medicaid · 18.0% skilled · 41.0% private pay | 3.14× · 41.0% Medicaid · 23.0% skilled · 36.0% private pay | 3.21× · 41.0% Medicaid · 28.0% skilled · 31.0% private pay | 3.28× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay | 3.28× · 41.0% Medicaid · 33.0% skilled · 26.0% private pay · trimmed to fit the census |
| 46.0% | 3.03× · 46.0% Medicaid · 18.0% skilled · 36.0% private pay | 3.10× · 46.0% Medicaid · 23.0% skilled · 31.0% private pay | 3.16× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · current mix | 3.16× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix | 3.16× · 46.0% Medicaid · 28.0% skilled · 26.0% private pay · trimmed to fit the census · current mix |
| 51.0% | 2.98× · 51.0% Medicaid · 18.0% skilled · 31.0% private pay | 3.05× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay | 3.05× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 3.05× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census | 3.05× · 51.0% Medicaid · 23.0% skilled · 26.0% private pay · trimmed to fit the census |
| 56.0% | 2.93× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay | 2.93× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 2.93× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 2.93× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census | 2.93× · 56.0% Medicaid · 18.0% skilled · 26.0% private pay · trimmed to fit the census |
Best coverage 3.40× at 36.0% Medicaid / 38.0% skilled, against a 1.30× covenant.
Basis & in-place operations
Operating trajectory
Debt & exit
Buyer cost of capital (REIT level)
State overrides applied to this acquisition grade
None. Grading is on the national basis, so every requirement table and market read is the unadjusted live series.
Cash flow — per unit, live-escalatedhold 7 yrs
| Yr | Occ | Revenue | Expenses | NOI | Capex | Debt service | Cash flow | Loan balance |
|---|---|---|---|---|---|---|---|---|
| 1 | 88.0% | $49,453 | $31,813 | $17,640 | $1,235 | $9,803 | $6,602 | $143,115 |
| 2 | 90.0% | $52,600 | $33,000 | $19,601 | $1,272 | $9,803 | $8,525 | $143,115 |
| 3 | 92.0% | $55,920 | $34,232 | $21,688 | $1,309 | $11,253 | $9,125 | $141,619 |
| 4 | 92.0% | $58,157 | $35,513 | $22,644 | $1,348 | $11,253 | $10,043 | $140,017 |
| 5 | 92.0% | $60,483 | $36,843 | $23,641 | $1,388 | $11,253 | $11,000 | $138,301 |
| 6 | 92.0% | $62,902 | $38,224 | $24,678 | $1,429 | $11,253 | $11,996 | $136,465 |
| 7 | 92.0% | $65,419 | $39,660 | $25,758 | $1,471 | $11,253 | $13,034 | $134,498 |
Verdict tolerance
Every check measures the slack between your number and what the live market read requires. Widen the band and borderline assumptions pass; tighten it and they flag. Changes re-grade all 15 assumptions immediately — currently 4 flagged.
15 assumptions graded
Pricing, credit and returns vs. P12 Sector Capital Markets3 flagged
Paying $235,000/unit on trailing NOI prices this asset −0.23 pp inside the yield a Elevated sector-capital market clears at. Values are printing −2.1% y/y and the health-care REIT tape is −4.6% y/y — the marginal buyer is not paying up.
Quote assumption is −1.55 pp through where this market is clearing. Net tightening is +12 and CRE delinquency 1.6%; re-underwrite at 8.40% before crediting the spread to returns.
Proceeds sit inside the 60% ceiling; the binding constraint is LTV at $143,115/unit.
Coverage and debt yield both clear the Elevated-band credit tests, including after the 2-year interest-only period rolls off.
Exit assumes the buyer in year 7 pays a tighter cap than you are paying today, while CRE values print −2.1% y/y. A Elevated band supports 20 bp/yr of expansion — reprice the residual before crediting it to IRR.
Returns clear the 13.5% hurdle at 3.44× equity multiple and 10.5% average cash-on-cash.
Census cushion is 9.7 pp: occupancy can fall to 76.3% before cash flow turns negative.
Cost of capital, FFO and NAV — REIT-level tests1 flagged
Year-one yield of 7.40% against a 6.81% blended cost of capital leaves +0.58 pp — below the +1.00 pp a Elevated market requires. With the REIT tape at −4.6% y/y, issuing equity into this spread destroys value regardless of asset quality.
Funded at 35% corporate leverage the asset generates 8.36% on equity, +0.26 pp above the cost of equity — accretive in year one.
Basis is inside the $267,277/unit implied-cap value, so the acquisition marks up NAV per share at the buyer's own trading level.
Revenue and expense growth vs. P9 Labor and P13 Insurance0 flagged
Expense growth is at or above the 3.6% the live labor feeds imply, so margin is not being underwritten on cost relief that has not arrived.
Insurance escalation is at or above the 5.9% the live P13 feeds are printing.
Rate growth clears live blended cost inflation, so margin expands over the hold rather than relying purely on the occupancy ramp.
Basis and capex vs. P14 Construction Inputs0 flagged
Basis is 28% below live replacement cost of $324,293/unit — with starts at −18% y/y, competing supply cannot be built to this basis.
Reserve covers the $1,200/unit floor implied by live construction-input inflation, escalated at 3.0%/yr over the hold.
Grading history
Every change to your assumptions or tolerance is snapshotted here with a timestamp.
Sensitivity & tornado — what actually moves the returnLevered IRR · base 22.1%
Every cell re-runs the full acquisition evaluator on the perturbed assumption set against the same live feeds, tolerance rule and state basis as the graded case — the centre cell is your underwriting exactly. Cells are shaded by outcome and annotated with the number of assumptions the live market test flags at that point.
| Rate / RevPOR growth \ Exit cap rate | 6.00% | 6.25% | 6.50% | 6.75% | 7.00% | 7.25% | 7.50% |
|---|---|---|---|---|---|---|---|
| 2.50% | 15.3%6 | 14.3%6 | 13.4%6 | 12.4%7 | 11.5%7 | 10.6%7 | 9.7%7 |
| 3.00% | 18.7%5 | 17.8%5 | 16.9%5 | 16.0%5 | 15.2%5 | 14.4%5 | 13.6%5 |
| 3.50% | 21.8%5 | 20.9%5 | 20.0%5 | 19.2%5 | 18.4%5 | 17.6%5 | 16.9%5 |
| 4.00% | 24.5%4 | 23.7%4 | 22.9%4 | 22.1%4 | 21.3%4 | 20.6%4 | 19.8%4 |
| 4.50% | 27.1%4 | 26.3%4 | 25.5%4 | 24.7%4 | 23.9%4 | 23.2%4 | 22.5%4 |
| 5.00% | 29.5%4 | 28.7%4 | 27.9%4 | 27.1%4 | 26.4%4 | 25.7%4 | 25.0%4 |
| 5.50% | 31.7%4 | 30.9%4 | 30.1%4 | 29.4%4 | 28.7%4 | 28.0%4 | 27.3%4 |
Small figure in each cell is the count of assumptions flagged against the live market read at that combination. Range spans 9.7% to 31.7%.
Tornado — Levered IRR swing on a symmetric shock to each assumption
- Rate / RevPOR growth11.1% swing3.00% → 16.0% · 5.00% → 27.1%
- In-place occupancy8.7% swing90.3% → 17.6% · 81.7% → 26.3%
- Stabilized occupancy7.0% swing88.3% → 18.4% · 95.7% → 25.4%
- Hold period4.8% swing9 yr → 20.4% · 5 yr → 25.1%
- Price / unit4.3% swing$249k → 20.0% · $221k → 24.3%
- Opex growth4.2% swing4.20% → 19.8% · 2.80% → 24.0%
- Exit cap rate3.4% swing7.29% → 20.4% · 6.21% → 23.8%
- Loan to value3.2% swing54.0% → 20.6% · 66.0% → 23.9%
- Senior coupon1.7% swing7.67% → 21.2% · 6.03% → 22.9%
- Operating expense ratio1.4% swing62.7% → 21.4% · 69.3% → 22.8%
- Insurance growth1.0% swing7.50% → 21.5% · 4.50% → 22.6%
- Capex reserve0.4% swing$1440 → 21.9% · $960 → 22.3%
Bars are ranked by the spread between the down and up shock, each sized to the assumption's own plausible move rather than a flat percentage, so exit cap and coupon are not compared on a false common scale. Base levered irr is 22.1%.
Debt structuring — floating curve, cap, refinance and maturityfloating · avg 5.65% · min DSCR 1.84× yr 1
The graded case sizes one loan at one coupon. This runs the same live-escalated NOI path against the structure you would actually sign: an index path with the drift the market is pricing, a purchased cap with a strike and a tenor, an interest-only tranche rolling into amortization, a mid-hold take-out tested on that year's NOI, and a maturity test at exit-level rates.
Structure
Refinance / take-out tests
| Yr | Index | Hedge | All-in coupon | NOI | Debt service | DSCR | Cash flow | Balance |
|---|---|---|---|---|---|---|---|---|
| 1 | 4.35% | capped 4.50% | 6.70% | $17,640 | $9,589 | 1.84× | $6,816 | $143,115 |
| 2 | 4.00% | capped 4.50% | 6.35% | $19,601 | $9,088 | 2.16× | $9,241 | $143,115 |
| 3 | 3.65% | capped 4.50% | 6.00% | $21,688 | $10,297 | 2.11× | $10,082 | $141,358 |
| 4 | 3.30% | unhedged | 5.65% | $22,644 | $9,913 | 2.28× | $11,383 | $139,255 |
| 5 | 2.95% | unhedged | 5.30% | $23,641 | $9,537 | 2.48× | $12,716 | $136,784 |
| 6 | 2.60% | unhedged | 4.95% | $24,678 | $9,167 | 2.69× | $14,082 | $133,923 |
| 7 | 2.25% | unhedged | 4.60% | $25,758 | $8,804 | 2.93× | $15,483 | $130,657 |
Mid-hold refinance — year 4
- Take-out coupon
- 5.40%
- NOI at refinance
- $22,644/unit
- Lender value
- $328,179/unit
- Coverage test
- $248,926
- Debt-yield test
- $238,361
- LTV test
- $203,471
- Binding proceeds
- $203,471 (LTV)
- Balance to repay
- $139,255
- Outcome
- Clears with $64,215/unit of release
Maturity / take-out risk — year 7
- Balance at maturity
- $130,657/unit
- Forward NOI
- $26,883/unit
- Exit value
- $398,271/unit
- Rate assumed
- 4.00%
- Refinance capacity
- $246,928/unit
- LTV at exit
- 32.8%
- Outcome
- Refinanceable with $116,271/unit spare
- The cap expires after year 3; years 4–7 carry an unhedged coupon, so the last 4 year(s) of coverage move one-for-one with the index.
- On the drift priced here the index never trades through the 4.50% strike, so the 95 bp premium buys tail protection only — it earns nothing in the base case.
Equity waterfall — LP, GP and promotedeal 22.1% · LP 19.5% · GP 34.9%
The levered stream the graded case produces belongs to the partnership, not to the LP. It is split here through the preferred return, the GP catch-up and the IRR tiers, so the number quoted to capital is the number capital receives.
Partnership terms
Residual tiers (LP share above each hurdle)
| Yr | Distributable | Pref to LP | GP catch-up | Tier 1 (80/20) | Tier 2 (70/30) | Tier 3 (60/40) | LP | GP |
|---|---|---|---|---|---|---|---|---|
| 1 | $6,602 | $6,602 | $0 | $0 | $0 | $0 | $6,602 | $0 |
| 2 | $8,525 | $8,525 | $0 | $0 | $0 | $0 | $8,525 | $0 |
| 3 | $9,125 | $9,125 | $0 | $0 | $0 | $0 | $9,125 | $0 |
| 4 | $10,043 | $10,043 | $0 | $0 | $0 | $0 | $10,043 | $0 |
| 5 | $11,000 | $11,000 | $0 | $0 | $0 | $0 | $11,000 | $0 |
| 6 | $11,996 | $11,996 | $0 | $0 | $0 | $0 | $11,996 | $0 |
| 7 | $270,833 | $73,310 | $39,504 | $93,086 | $64,931 | $0 | $193,231 | $77,601 |
- The promote costs the LP 2.6 pp of IRR — quote 19.5%, not 22.1%, in LP-facing material.
Figures are per unit, on the same levered stream as the graded levered IRR. The preferred return compounds annually on LP contributions and accrues when a year cannot pay it; tier splits release only once the LP's realised IRR clears the hurdle below them.
LP economics — net of fees, co-invest and clawbacknet LP 18.3% · 1.2 pp fee drag
The promote panel splits the levered stream but still reports a gross-of-fee LP return, and it credits the GP with promote even where the LP never earned its preferred return over the whole life of the deal. An LP subscribes to the net number. This layers the acquisition, asset-management and disposition fees, treats the GP's cash co-invest as return of capital rather than promote, and applies a lifetime lookback that hands interim promote back when the pref is missed.
| Fee | Basis | $/unit | Total |
|---|---|---|---|
| Acquisition fee | 1.00% of all-in basis, at close | $2,385 | $286,230 |
| Asset management fee (7 yrs) | 1.25% of invested equity per year | $8,348 | $1.00M |
| Disposition fee | 1.00% of gross sale price | $3,983 | $477,925 |
| Total | 15.4% of committed equity | $14,716 | $1.77M |
| Source | $/unit | Share of GP take |
|---|---|---|
| Promote | $37,536 | 44.9% |
| Return on co-invest | $31,341 | 37.5% |
| Fees | $14,716 | 17.6% |
| Total to GP | $83,593 | 100% |
- Fees cost the LP 1.2 pp of IRR: quote 18.3% net, not 19.5% gross.
- Total fees equal 15.4% of LP-and-GP equity — above the roughly 10% an institutional LP will accept without a fee offset against the promote.
- Lookback passes: the LP clears its preferred return over the life of the deal, so no promote is returned.
Structured capital stack — sweep, trap, mezzanine, take-out74% stack leverage · min coverage 1.31× yr 1
Senior-housing paper is not one loan at one coupon. It has an excess cash-flow sweep, a springing coverage covenant that traps distributions long before it defaults, a mezzanine or preferred layer filling the gap to the equity cheque the sponsor wants to write, an extension option with its own tests, and a take-out lender at maturity who re-sizes on today's market rather than yesterday's purchase price. Every row runs off the graded NOI path, per unit.
| Yr | NOI | Senior DS | Mezz DS | Pref due | Pref paid | Pref balance | Senior DSCR | Stack DSCR | Sweep | Senior balance | To common |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $17,640 | $9,803 | $2,194 | $1,431 | $1,431 | $14,311 | 1.80× | 1.31× | $1,488 | $141,627 | $1,488 |
| 2 | $19,601 | $9,701 | $2,194 | $1,431 | $1,431 | $14,311 | 2.02× | 1.47× | $2,501 | $139,126 | $2,501 |
| 3 | $21,688 | $11,253 | $2,194 | $1,431 | $1,431 | $14,311 | 1.93× | 1.46× | $2,750 | $136,376 | $2,750 |
| 4 | $22,644 | $11,253 | $2,194 | $1,431 | $1,431 | $14,311 | 2.01× | 1.52× | $3,209 | $133,168 | $3,209 |
| 5 | $23,641 | $11,253 | $2,194 | $1,431 | $1,431 | $14,311 | 2.10× | 1.59× | $3,687 | $129,481 | $3,687 |
| 6 | $24,678 | $11,253 | $2,194 | $1,431 | $1,431 | $14,311 | 2.19× | 1.66× | $4,185 | $125,295 | $4,185 |
| 7 | $25,758 | $11,253 | $2,194 | $1,431 | $1,431 | $14,311 | 2.29× | 1.73× | $4,704 | $120,591 | $4,704 |
| Test | Value | Required | Result | Detail |
|---|---|---|---|---|
| Extension option — year 3 (+2 yrs) | 1.93× · 15.90% | 1.30× · 9.00% | clears | Coverage 1.93× and debt yield 15.90% at the option date, against the lender's 1.30× / 9.00% tests. Exercise fee 358 $/unit. |
| Take-out at maturity | 233,621 vs 153,985 $/unit | proceeds ≥ outstanding stack | clears | A 6.60% take-out lender valuing at a 7.00% cap sizes to 233,621 $/unit, bound by LTV, against 153,985 $/unit of senior, mezzanine and preferred outstanding. |
- The sweep applies 22,524 $/unit to senior principal over the hold, de-levering faster than the schedule but at the cost of current return.
Monte Carlo — probability, not a single pointnot run
The graded case is one draw. This resamples exit cap, rent growth, insurance, debt cost, occupancy, capex and entry price around your inputs — each volatility scaled to the width of the live market band and to the selected state's catastrophe and cost factors — then runs the full evaluator on every trial. The seed is fixed, so the same inputs reproduce the same distribution for review.
Run the simulation to see the distribution. Every trial is a full re-grade against the live feeds, so a few thousand trials take a moment.
Correlated risk — shocks that arrive togethernot run
Independent draws understate tail risk: exit caps and debt cost move on the same capital-markets factor, insurance and payroll inflate together, and a soft lease-up shows up as slipped absorption months rather than a lower stabilized occupancy. Every trial here is drawn through a correlation matrix, then re-run through the monthly engine — so a coverage breach is reported with the month it lands in, not as an annual average that never breaches.
Run the correlated simulation to see joint outcomes. Every trial re-grades against the live feeds and rebuilds the month-by-month cash flow, so it is slower than the independent run.
Credit & covenant position — pro forma for this dealall tests clear
An asset can underwrite well and still be unfundable at the entity. The deal's incremental debt, EBITDA, interest and asset value are added to the balance sheet you enter, then every covenant is recomputed pro forma with headroom stated in the covenant's own unit, so a breach is unambiguous.
Balance sheet
Covenant limits & funding
| Covenant | Limit | Before | Pro forma | Headroom | Result | Basis |
|---|---|---|---|---|---|---|
| Net debt / EBITDA | ≤ 6.00× | 4.48× | 4.50× | 1.50× | Clear | The deal adds 2.1mm of EBITDA against 22mm of debt, leaving 1.50× of headroom. |
| Fixed-charge coverage | ≥ 1.80× | 3.16× | 3.14× | 1.34× | Clear | Coverage holds at 3.14× after 1.4mm of new fixed charges. |
| Secured debt / gross assets | ≤ 40.0% | 4.1% | 4.3% | 35.7 pp | Clear | Secured basket still has 35.7 pp of capacity. |
| Unencumbered assets / unsecured debt | ≥ 150.0% | 259.3% | 258.6% | 109 pp | Clear | Unencumbered pool covers unsecured debt 258.6%. |
| Total leverage (net debt / gross assets) | ≤ 45.0% | 33.6% | 33.8% | 11.2 pp | Clear | Leverage lands at 33.8% with 11.2 pp of covenant room. |
- Funding mix: 17mm mortgage at 6.85%, 5mm line at 5.60%, 7mm equity at a 8.10% cost — blended 6.95%.
- Year-one yield of 7.4% is accretive by 0.45 pp against that mix.
Downside stress suite — named cases, not a haircut4 of 8 cases fail · hurdle 13.0% · coverage 1.25×
Each case is a defined scenario — a recession, a rate shock, a catastrophe-driven insurance step, a cost overrun, a stalled lease-up, cap-rate expansion, and the combined severe case — pushed through the same evaluator, debt sizing and entity covenant tests as the base underwriting. A case fails if coverage drops through the floor, the return misses the hurdle, a covenant breaches, or sale proceeds no longer retire the loan.
| Case | Levered IRR | Multiple | Min DSCR | Debt yield | Break-even occ. | NAV | Covenants | Flagged | Result |
|---|---|---|---|---|---|---|---|---|---|
| 22.1% | 3.44× | 1.80× | 12.33% | 76.3% | −10.8% | clear | 4 | Survives | |
| 2.3% | 1.14× | 1.43× | 11.53% | 75.3% | −4.6% | clear | 7 | Fails | |
| 17.7% | 2.82× | 1.39× | 12.33% | 81.3% | −10.8% | clear | 3 | Survives | |
| 11.0% | 1.88× | 1.68× | 11.91% | 77.3% | −7.7% | clear | 7 | Fails | |
| 19.8% | 3.10× | 1.79× | 12.23% | 78.1% | −10.0% | clear | 4 | Survives | |
| 12.8% | 2.12× | 1.58× | 11.49% | 77.0% | −4.2% | clear | 7 | Fails | |
| 19.1% | 2.91× | 1.80× | 12.33% | 76.3% | −10.8% | clear | 4 | Survives | |
| n/a | 0.07× | 0.90× | 11.21% | 80.6% | −1.8% | clear | 6 | Fails |
- Coverage breaks in: Combined severe. Those cases require a cash trap, a paydown or a smaller loan at close.
- Equity is wiped out at exit in: Combined severe.
Covenant results reuse the balance sheet entered in the credit panel, so a case that clears the asset but breaks the entity still reads as a failure.
Payer mix & operator EBITDAR coverage1 test fail · 39% skilled revenue
A single blended NOI hides who actually pays. Revenue is rebuilt from the day mix at your own rate deck, run through the expense ratio and the manager’s fee to EBITDARM and EBITDAR, then reconciled against the NOI the acquisition run is underwriting. Private pay is the residual of the census, so only the three reimbursed shares are entered.
Day mix
Private pay & insurance: 26.0% of days, residual of the census. Census is taken from the deal at 86.0% occupancy — 314 patient days per bed per year.
Rate deck & operator terms
| Payer | Share of days | Net rate / day | Revenue / bed / yr | Share of revenue |
|---|---|---|---|---|
| Medicare Part A | 12.0% | $640 | $24,108 | 18.8% |
| Managed care / MA | 16.0% | $505 | $25,363 | 19.8% |
| Medicaid | 46.0% | $265 | $38,264 | 29.9% |
| Private pay & insurance | 26.0% | $385 | $31,421 | 24.6% |
| Ancillary & Part B | — | $28 | $8,789 | 6.9% |
| Test | This deal | Threshold | Result | Basis |
|---|---|---|---|---|
| Day mix sums to census | 74.0% named · 26.0% private | ≤ 100% named | Clear | Medicare, managed and Medicaid days are entered directly; private pay is the residual, so the three named shares cannot exceed the whole census. |
| Mix rebuild reconciles to underwritten NOI | +134.8% | within ±10% | Flag | Rebuilding revenue from the day mix gives $37,104 of EBITDAR per bed against $15,800 underwritten. A wide gap means the rate deck, the census or the expense ratio is wrong. |
| EBITDAR covers year-one debt service | 3.78× | 1.30× min | Clear | Coverage is struck after the manager's fee, which is where a lender sits in a RIDEA or an operating structure. |
| Skilled revenue mix | 38.7% of revenue | ≥ 25% preferred | Clear | Medicare and managed-care days carry the margin. A thin skilled mix leaves revenue tied to state Medicaid appropriations, which P11 grades as a policy exposure rather than a market one. |
| Medicaid concentration | 46.0% of days | ≤ 65% of days | Clear | Above roughly two thirds of days, a single state's rate cycle sets the asset's value and exit cap. |
| EBITDAR margin | 29.0% | ≥ 10% | Clear | Margin after the management fee. Thin-margin operators break covenant on a single quarter of agency labor, which is the P9 exposure. |
- Reconciliation gap: setting T-12 NOI per unit to $37,104 would make the acquisition model consistent with this rate deck and census.
Payer-mix sensitivityall 25 cells clear 1.30× coverage
Rows step Medicaid days, columns step skilled days (Medicare Part A plus managed care, split at the current 43/57 ratio). The rate deck, expense ratio, management fee and year-one debt service are held at the current run, so each cell isolates the mix. Rebuilt EBITDAR per bed after the management fee — the NOI the mix actually supports.
Census constraint: Private pay is the residual: every day added to Medicaid or skilled care is taken out of private pay, and cells that would drive private pay negative are unusable.
EBITDAR / NOI per bed: $34,393 weakest → $39,816 strongestBest-coverage region: 36.0–36.0% Medicaid with 38.0–38.0% skilled days, peaking at 4.06× coverage (1 cell).
- 36.0% Medicaid
- 41.0% Medicaid
- 46.0% Medicaid
- 51.0% Medicaid
- 56.0% Medicaid
| Medicaid ↓ / skilled → | 18.0% | 23.0% | 28.0% | 33.0% | 38.0% |
|---|---|---|---|---|---|
| 36.0% | |||||
| 41.0% | |||||
| 46.0% | |||||
| 51.0% | |||||
| 56.0% |
Custom mix change
Enter your own Medicare, managed-care and Medicaid change — in percentage points, as a target share of days, or as target patient days per bed — and the waterfall walks that exact mix instead of a grid cell.
Select any cell in the grid to open a waterfall bridge that walks the move from the current mix to that cell, leg by leg, through revenue, expenses, the management fee and coverage.
- Every one-point shift of days from Medicaid into skilled care moves revenue by roughly the rate spread ($375 per day between Medicare and Medicaid on this deck), which is why a mix assumption deserves the same scrutiny as the exit cap.
- Cells marked n/a are arithmetically impossible: the two axes together would exceed the census and drive private pay negative.
Operator & lease structuretriple-net · 3 tests fail
The same building is a different investment depending on how it is held. Under a triple-net lease the owner takes contractual rent and the operator absorbs labor and insurance escalation — until coverage erodes and the rent resets. Under RIDEA the owner books property cash flow net of manager fees and therefore carries P9 and P13 inflation directly. Switch the structure to see the same deal graded both ways.
Lease terms
Structure outcome
| Yr | Contract rent | Operator EBITDAR | Coverage | Owner cash |
|---|---|---|---|---|
| 1 | $17,038 | $17,640 | 1.04× | $14,993 |
| 2 | $17,463 | $19,601 | 1.12× | $15,368 |
| 3 | $17,900 | $21,688 | 1.21× | $17,900 |
| 4 | $18,348 | $22,644 | 1.23× | $18,348 |
| 5 | $18,806 | $23,641 | 1.26× | $18,806 |
| 6 | $19,276 | $24,678 | 1.28× | $19,276 |
| 7 | $19,758 | $25,758 | 1.30× | $19,758 |
| Test | This structure | Threshold | Result | Basis |
|---|---|---|---|---|
| Owner year-one yield over buyer WACC | 6.29% vs 6.81% | positive spread | Flag | Under a triple-net lease the owner's yield is the contractual rent on basis, so the spread over the buyer's weighted cost of capital is the whole economic case. |
| Escalator keeps pace with opex inflation | 2.50%/yr vs opex 3.50%/yr | escalator ≥ opex growth − 1.5pp | Tight | A fixed bump below the operator's cost inflation erodes coverage every year by construction — the lease looks safe on day one and breaks mid-term. |
| CPI cap does not bind away the bump | cap not binding | cap ≥ stated bump | Clear | Where CPI-linked rent is capped below the stated escalator, the effective growth is the cap and every downstream coverage and IRR figure must use it. |
| Year-one rent coverage | 1.04× | 1.20× covenant | Flag | EBITDAR over contractual rent at the operator level. Below the covenant the rent is not collectible in full regardless of what the lease says. |
| Minimum coverage across the hold | 1.04× | 1.20× covenant | Flag | Coverage first breaks in year 1; rent from that year is shown reset by the 12% re-lease haircut. |
| Credit support behind the rent | 6 months · $8,519/unit | ≥ 6 months | Tight | Security deposit plus corporate guaranty is the only thing between a coverage breach and an immediate cash-flow gap during re-tenanting. |
- Rent coverage breaks the 1.20× covenant in year 1. The owner-cash column applies the 12% re-lease reset from that year forward, so the exit value and IRR implied by this structure sit below the headline acquisition run.
- Contractual rent yield of 6.29% sits below the 6.62% going-in cap in the headline run — the lease gives away part of the property cash flow to the operator in exchange for the credit.
Sources & uses and the refinance path$30.70mm total uses · 1 test fail
The headline run calls whatever debt does not cover “equity”. A closing statement does not: fees, legal and diligence, working capital, an interest reserve and the funded capital plan all sit in uses, and the equity cheque is the plug. The true going-in yield on invested capital is then 6.18% against the 6.62% quoted on price and closing costs alone.
Closing costs & funding
Refinance / recapitalisation
| Uses | Amount | Per unit | Share | Basis |
|---|---|---|---|---|
| Purchase price | $28.20mm | $235,000 | 91.9% | 120 units at $235,000 |
| Closing costs | $0.42mm | $3,525 | 1.4% | 1.50% of price — transfer tax, title, escrow |
| Acquisition fee | $0.28mm | $2,350 | 0.9% | 1.00% to the sponsor at close |
| Legal, diligence & third parties | $0.11mm | $900 | 0.4% | counsel, PCA, environmental, appraisal, licensure |
| Financing costs | $0.17mm | $1,431 | 0.6% | 1.00% of senior proceeds |
| Funded capex programme | $0.78mm | $6,500 | 2.5% | upfront capital plan, funded at close |
| Working capital | $0.14mm | $1,200 | 0.5% | operating float, Medicaid receivable lag, licence bonds |
| Interest reserve | $0.59mm | $4,902 | 1.9% | 6 months of senior interest |
| Total uses | $30.70mm | $255,808 | 100.0% | all-in capital required to close and fund the plan |
| Sources | Amount | Per unit | Share | Basis |
|---|---|---|---|---|
| Senior mortgage | $17.17mm | $143,115 | 55.9% | binding of the loan-to-value, coverage and debt-yield constraints |
| Sponsor co-invest | $1.35mm | $11,269 | 4.4% | 10% of the equity cheque |
| Limited-partner equity | $12.17mm | $101,424 | 39.6% | balance of the equity requirement |
| Total sources | $30.70mm | $255,808 | 100.0% | equity is the residual after the binding debt constraint |
| Test | This deal | Threshold | Result | Basis |
|---|---|---|---|---|
| Sources equal uses | $30.70mm | $30.70mm | Clear | The equity cheque is the plug, so a residual here means a line item is being double counted. |
| Fee and reserve drag on going-in yield | −0.45 pp | ≤ 0.40 pp | Flag | Adding fees, working capital, the interest reserve and the funded capex plan moves the true going-in yield to 6.18% against the 6.62% quoted on price plus closing costs alone. |
| Equity cheque as a share of uses | 44.1% | ≤ 55% of uses | Clear | Where the binding debt constraint pushes equity above roughly half of uses, the levered return is close to the unlevered one and the structure stops earning its complexity. |
| Interest reserve covers the ramp | 6 months vs 36 months to stabilise | reserve ≥ 6 months | Tight | During census build the asset does not cover its own debt service; the reserve is what stops a technical default in the ramp. |
| Refinance clears the existing loan | $8.57mm cash-out | proceeds ≥ payoff + costs | Clear | Take-out sized in year 4 on $22,644 of NOI per unit at a 6.90% cap: $25.60mm at 65% loan-to-value against $26.96mm at 1.35× coverage, so the binding constraint is proceeds. |
| Coverage on the take-out loan | 1.42× | 1.35× min | Clear | Coverage is recomputed on the new constant, so a lower take-out coupon buys proceeds and a higher one costs them. |
- Fees, reserves and funded capex are large enough that the quoted going-in cap materially overstates the yield on invested capital. Grade the deal on the true figure.
Comparable transactions — basis, cap and rate percentile40th percentile of 5 comps · 3 tests fail
The pillar bands say what the capital-markets environment requires; they do not say what buildings like this one have traded for. Peer prices are adjusted for vintage, market tier and acuity before the deal’s basis, going-in cap, census and revenue per occupied unit are ranked against them, so a premium is stated on a like-for-like basis.
Appraisal adjustments to the peer set
Subject against the set
| Comparable | Period | Units | Price / unit | Adjusted | Cap | Occ | Revenue / occ. unit | vs. subject |
|---|---|---|---|---|---|---|---|---|
| Primary-market AL, 2018 vintage | trailing 4 qtrs | 108 | $262,000 | $262,000 | 6.55% | 89.6% | $5,950 | subject cheaper |
| Sunbelt AL/MC portfolio, 6 assets | trailing 4 qtrs | 604 | $241,000 | $241,000 | 6.85% | 87.2% | $5,480 | subject cheaper |
| Value-add AL, 2004 vintage | trailing 8 qtrs | 96 | $178,000 | $178,000 | 7.60% | 79.8% | $4,900 | subject dearer |
| Core AL, top-15 metro | trailing 4 qtrs | 132 | $318,000 | $318,000 | 6.05% | 93.1% | $6,740 | subject cheaper |
| Tertiary AL, single asset | trailing 8 qtrs | 74 | $152,000 | $152,000 | 8.10% | 82.4% | $4,260 | subject dearer |
| Test | This deal | Threshold | Result | Basis |
|---|---|---|---|---|
| Basis against the adjusted peer median | $238,525 vs $241,000 | within +10% of median | Clear | Peer prices are adjusted 0.0% for vintage, market tier and care mix before the comparison, so the premium is on a like-for-like basis. |
| Where the basis sits in the peer range | 40th percentile | ≤ 75th percentile | Clear | The peer set runs $152,000 to $318,000 per unit on an adjusted basis. |
| Going-in cap against the adjusted median cap | 6.62% vs 6.85% | at or above median | Flag | Buying inside the peer cap while also paying above the peer basis means the deal is priced on assumptions the comparable set has not validated. |
| Census against the peer median | 86.0% vs 87.2% | within 3 pp of median | Tight | A basis at or above the peer median on below-peer census is an underwriting bet on the ramp, not a market-supported price. |
| Revenue per occupied unit against peers | $4,503 vs $5,480 monthly | within ±15% of median | Flag | Derived from the underwritten NOI, expense ratio and census. A rate well above the peer set has to be justified by acuity or by market, not assumed. |
| Exit cap against the peer entry median | 6.75% vs 6.85% | exit ≥ peer median | Flag | Underwriting an exit tighter than where comparable assets are currently trading in is the single most common source of overstated returns. |
- Comparable set: 5 assisted-living transactions, 1,014 units in total. Prices are per unit.
- No appraisal adjustments are applied. If the subject differs from the peer set in vintage, market tier or acuity, set those adjustments so the percentile ranking is meaningful.
Reimbursement path — methodology, case mix and rate-year timingimplied 3.41% vs underwritten 4.00% · optimistic
Skilled and higher-acuity assets do not grow revenue at "a growth rate". They grow at whatever the state rate year hands them, adjusted for the methodology the state sets rates under, the direction acuity is drifting, supplemental payments and provider tax, and — on the Medicare side — the market basket net of productivity, sequestration and any parity unwind. Timing counts as much as level: a rate year starting in July only delivers 50% of its increase into the first hold year.
| Yr | Timing | Medicaid | Medicare | Private | CMI | Blended | Index |
|---|---|---|---|---|---|---|---|
| 1 | 50% | 2.42% | 0.30% | 4.00% | 1.149 | 2.61% | 102.6 |
| 2 | 100% | 4.03% | 0.60% | 4.00% | 1.158 | 3.54% | 106.2 |
| 3 | 100% | 4.03% | 0.60% | 4.00% | 1.168 | 3.54% | 110.0 |
| 4 | 100% | 4.04% | 0.60% | 4.00% | 1.177 | 3.55% | 113.9 |
| 5 | 100% | 4.05% | 0.60% | 4.00% | 1.186 | 3.55% | 118.0 |
| 6 | 100% | 4.05% | 0.60% | 4.00% | 1.196 | 3.55% | 122.1 |
| 7 | 100% | 4.06% | 0.60% | 4.00% | 1.205 | 3.56% | 126.5 |
- A case-mix state converts acuity drift into rate almost one-for-one, which is why the MDS and PDPM coding discipline is an underwriting item, not an operating detail.
- The deal is underwritten at 4.00% revenue growth; the reimbursement path supports 3.41%. That 0.59 pp gap compounds to -2,371 $/unit of NOI by exit and reprices at the exit cap.
- The rate year starts in July, so only 50% of the announced increase lands in the first hold year. Underwriting the full increase in year one overstates NOI at the point coverage is tightest.
- Medicare is net of 2.0% sequestration, leaving 0.60% after the 0.40 pp productivity cut.
Monthly cash flowpeak equity $11.45mm · min DSCR 1.22× in month 1
Absorption, the timing of the annual rate increase and seasonality all live in months. The annual build overstates early NOI by $245,011 in year one (+13.1%) and cannot show the coverage trough or the true peak funding requirement — both of which decide reserve sizing.
Timing
Structure
| Month | Occ % | Revenue | Expenses | NOI | Capex | Interest | Principal | Cash flow | DSCR | Cumulative |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan #1 | 86.2 | $475,515 | $343,750 | $131,764 | $12,000 | $98,034 | $0 | $21,730 | 1.22× | $-11,427,470 |
| Feb #2 | 86.3 | $477,405 | $342,331 | $135,074 | $12,000 | $98,034 | $0 | $25,040 | 1.26× | $-11,402,430 |
| Mar #3 | 86.5 | $482,701 | $335,255 | $147,446 | $12,000 | $98,034 | $0 | $37,412 | 1.38× | $-11,365,018 |
| Apr #4 | 86.7 | $488,015 | $328,835 | $159,180 | $12,000 | $98,034 | $0 | $49,146 | 1.50× | $-11,315,872 |
| May #5 | 86.8 | $491,881 | $325,736 | $166,145 | $12,000 | $98,034 | $0 | $56,112 | 1.57× | $-11,259,760 |
| Jun #6 | 87.0 | $494,781 | $328,298 | $166,483 | $12,000 | $98,034 | $0 | $56,449 | 1.58× | $-11,203,311 |
| Jul #7 | 87.2 | $496,708 | $333,532 | $163,177 | $12,000 | $98,034 | $0 | $53,143 | 1.54× | $-11,150,168 |
| Aug #8 | 87.3 | $497,167 | $335,435 | $161,733 | $12,000 | $98,034 | $0 | $51,699 | 1.53× | $-11,098,469 |
| Sep #9 | 87.5 | $495,657 | $329,324 | $166,333 | $12,000 | $98,034 | $0 | $56,299 | 1.57× | $-11,042,170 |
| Oct #10 | 87.7 | $492,660 | $327,550 | $165,110 | $12,000 | $98,034 | $0 | $55,077 | 1.56× | $-10,987,093 |
| Nov #11 | 87.8 | $490,142 | $333,131 | $157,011 | $12,000 | $98,034 | $0 | $46,977 | 1.48× | $-10,940,116 |
| Dec #12 | 88.0 | $490,083 | $337,715 | $152,367 | $12,000 | $98,034 | $0 | $42,334 | 1.43× | $-10,897,782 |
- Absorption runs straight-line to stabilised occupancy over 36 months.
- Census and expense are seasonalised; the flu-season expense peak and the summer census peak do not coincide, so coverage bottoms in the first calendar quarter.
- Rate and expense increases land in month 1 of each year rather than spreading evenly, which is why year-one NOI differs from the annual build.
- Coverage first prints below 1.25× in month 1; the annual model cannot show this because it averages the year.
Exit feasibility & re-tradeachievable 7.36% vs underwritten 6.75% · 61 bp rich
An exit cap typed into a box is an assumption, not a test. The price a rational buyer pays is the price their own coverage, debt-yield, leverage and cash-return tests allow at the rates that will exist then. The cap below is derived from those tests — and the re-trade line is the basis today at which the 13.0% hurdle is restored if the market read is right and the ask is wrong.
The buyer’s own tests at exit
Exact arithmetic and findings
financeable price = max P where (exit NOI − debt service(P)) / (P − loan(P)) ≥ 7.00%, loan(P) = min(P × 62%, NOI ÷ (1.35 × constant(6.50%, 30y)), NOI ÷ 9.50%)achievable cap = exit NOI $3,225,991 ÷ financeable price $43,816,006 = 7.36%re-trade basis solves levered IRR(price, exit cap 6.75%) = 13.0% hurdle- A buyer facing a 6.50% coupon, 1.35× coverage, 9.5% debt yield and a 7.0% cash return can pay 365k per unit — 61 bp wider than the 6.75% exit underwritten here.
- The buyer's binding constraint at the financeable price is leverage cap; leverage lands at 62.0%.
- The hold clears the 13.0% hurdle across every exit cap from 2% to 30%, so the return does not depend on the residual assumption.
- The ask clears the hurdle with room: the basis could rise to $300,496/unit — 27.9% above the ask — before the 13.0% hurdle binds.
Assumption audit trailresolving provenance…
Committed run ledger0 committed runs · audit hash resolves on load
Everything else in this tab lives in the browser. A committed run does not: the recommendation, the readiness score, the state and care basis, the tolerance rule and the full numeric assumption set are written append-only to the backend under the deterministic audit hash. Committing the same hash twice returns the original row, so the ledger records decisions rather than keystrokes, and a later reader can prove which numbers the committee actually voted on.
No runs committed yet. The first commit becomes the baseline every later version of this deal is compared against.
Scenario comparison
Saved runs store assumptions only — every column is re-graded against the current live market read, so a run that cleared last month can flag today.No saved runs yet. Enter a set of assumptions above and save it, then adjust and save again to compare grades side by side (up to 8 runs per mode).
Portfolio roll-upno saved runs
Save two or more acquisition scenarios above and they roll up here into a single portfolio position — blended coverage, weighted caps, state concentration and total flagged assumptions.
Acquisition requirements are conditioned on the live band of the governing pillar: required going-in yield, mortgage spread, maximum proceeds, minimum coverage and debt yield, exit-cap expansion, required levered IRR and the spread over the buyer's weighted cost of capital all move with P12; expense and insurance escalation floors move with P9 and P13; the replacement-cost discount and capex-reserve floor move with P14. FFO and NAV tests are computed at the buyer's own stated cost of capital, so the same asset can be accretive to one balance sheet and dilutive to another. This is a market-consistency test on assumptions, not investment advice.
The saved acquisition run read back as a committee document: the offering terms, where the deal agrees with the live index, and the decision that follows. It is priced against the same read the header shows — on a cold load the last ratified snapshot — so it opens on real figures and re-prices itself when the live feeds land.
Assembling the memo from the ratified read…