Lessor lease revenue and re-leasing
Lease rate factor, straight-line rent, downtime.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: lessor lease revenue and re-leasing.Updated 4 November 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
The top of a lessor’s model. Rent is a lease rate factor, the monthly rent as a share of the asset’s value, times the price; fixed escalations are recognised straight line over the lease, so a receivable builds while cash runs below revenue and unwinds by the end. When a lease ends the asset earns nothing for its downtime, costs money to move to the next lessee, and is re-leased at a factor on its value at that date, which is lower than the value it was bought at. Counting months from close keeps a lease that ends part way through a year honest without a monthly sheet.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 37–41: Lease rate factor, current lease, Rent escalation, annual, Months left on the lease at close, Security deposit…
- Assumptions, rows 51–57: Downtime between leases, base case, Carrying cost while off lease, Transition and reconfiguration cost, Maintenance funded by the lessor at return…
- Acquisition, rows 12–16: Monthly rent at close, Annual rent in Y1, Security deposit, current lease, Lessee defaults in the selected case…
- Acquisition, rows 19–25: Downtime, selected case, Second lease starts, month after close, Second lease ends, month after close, Base value at the start of the second lease…
- Lease, rows 6–8: Year, Portfolio owned during the year, Portfolio sold at the end of the year
- Lease, rows 11–22: Months on the current lease, Current lease ends in the year, Rent contracted over the full term, Aircraft A: straight-line rent per month…
- Lease, rows 25–36: Months on the current lease, Current lease ends in the year, Rent contracted over the full term, Aircraft B: straight-line rent per month…
- Lease, rows 39–50: Months on the current lease, Current lease ends in the year, Rent contracted over the full term, Aircraft C: straight-line rent per month…
- Lease, rows 53–56: Cash rent, current leases, Lease revenue, straight line, current leases, Straight-line receivable written off, Straight-line receivable derecognised at the sale
- Re-leasing, rows 6–15: Months on the second lease, Second lease starts in the year, Second lease ends in the year, Rent per 1% a month of lease rate factor…
- Re-leasing, rows 18–27: Months on the second lease, Second lease starts in the year, Second lease ends in the year, Rent per 1% a month of lease rate factor…
- Re-leasing, rows 30–39: Months on the second lease, Second lease starts in the year, Second lease ends in the year, Rent per 1% a month of lease rate factor…
- Re-leasing, rows 42–47: Cash rent, second leases, Aircraft months off lease, Carrying cost off lease, Transition, reconfiguration and return maintenance…
- Reported, rows 6–29: Basic lease rents, Maintenance rents and other receipts, Total lease revenue, Net gain on sale of assets…
- Derived, rows 6–15: Net book value at the start of the year, Average net book value: mean of the year ends, Lease yield: basic lease rents / average net book value, Total lease revenue / average net book value…
- Forecast, rows 20–30: Lease yield: basic lease rents / average net book value, base (editorial), Lease yield: basic lease rents / average net book value, downside (editorial), Lease yield: basic lease rents / average net book value, upside (editorial), Lease yield: basic lease rents / average net book value, selected…
- P&L & Cash Flow, rows 17–38: Basic lease rents, Maintenance rents and other receipts, Total lease revenue, Net gain on sale of assets…
- P&L & Cash Flow, rows 53–58: Lease yield: basic lease rents / average net book value, Interest expense / average debt, Net spread: lease yield - cost of debt, Basic lease rents less interest expense…
- One Lease, row 9: Rent: lease rate factor x price x 12 months
What a reviewer looks for
- Every lease renewed the day it ends, at the same rent.
- Escalating rent booked as cash, so revenue climbs when the accounting holds it flat.
- A renewal priced on the purchase price rather than the value at the date it is signed.
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