So I'm looking at a model for core commercial property and the CoC yield is calculated by taking the {Net CF + CapEx + Any Bank Fees} / Equity Invested. Is it standard practice to exclude CapEx and bank fees when calculating Net CF for CoC calculations?
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No, it is not. But check how the deal is capitalized. Are the capex or debt fees capitalized in the deal via equity funded up front or debt future funding? If so, this would probably be why it’s done, if not, it’s wrong.
Is it also standard practice to exclude (or hardcode 0%) for years with negative CF when calculating average cash yield for investment period?
The model I'm looking at used =MAX(CoC formula, 0) to calculate each year's CoC.
I believe this would follow the same logic as above. If you have reserved that cash then yes you can draw on the reserved cash and net to $0. If not, it would be a capital call or you would be drawing on some future funded debt facility to cover this.
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