Showing a base case and a downside case together in an investor memo changes who invests

Take an investor memo that puts a base case and a downside case side by side on the same page: a base case of a 16.4 net IRR to LP with 2 percent rent growth and 25 basis points of cap expansion at exit, and a downside case of 9.1 with flat rents for two years and 75 basis points of expansion. That framing tends to produce a real split in response. Some investors will read the low number as the headline and pass on it alone. Others will come back with sharper questions about the reserve schedule and the insurance line than a single clean base case would ever prompt, and often end up funding. The argument for one clean base case is that most of the market presents one, and putting a 9 next to a 16 can anchor people on the 9 without them understanding the assumptions behind it. The argument for showing the range is that the range is the truth, and the downside number is the one that actually determines whether the deal survives. Sensitivity tables are a third option, and at smaller check sizes LPs often do not read them. What belongs in the memo itself versus what gets answered on a call is a real editorial decision, and reasonable sponsors land in different places on it.