An IC memo — short for investment committee memo — is the document a deal team submits to get a transaction approved. It packages the deal's economics, business plan, and risks into the committee's standard format, so the people who control the capital can weigh it against every other use of the firm's money.
Why It Matters in CRE
Most committee members won't tour the property or open the model — as far as the decision is concerned, the memo is the deal. The standard format is the point: with the same sections in the same order, a value-add multifamily deal and an industrial development compare on equal footing. Most memos cover the same ground:
- Executive summary — the deal, the ask, and headline returns in a page.
- Market overview — submarket supply, demand, and rent evidence behind the thesis.
- Business plan — what the team will do, on what timeline, at what cost.
- Projected returns — cash flows, return metrics, and their sensitivities.
- Risks and mitigants — what could go wrong, and why the deal survives it.
- Comparables — the sale and rent comps anchoring the assumptions.
A Worked Example
Take the returns section of a memo for a 188-unit value-add acquisition. It answers three questions: what are we paying, what do we make, and what breaks it.
- Total capitalization: $36.1M — $31.4M purchase, $3.5M renovation, $1.2M closing and reserves
- Financing: $23.5M loan (65% of cost), $12.6M equity
- Projected levered IRR: 14.9% over a five-year hold
- Equity multiple: 1.9x; average cash-on-cash 6.1%
- Stabilized yield on cost: 6.4%, against a 5.3% market cap rate
- Sensitivity: exit cap +50 bps cuts the IRR to roughly 13.1%
The last two lines do the persuading: the yield-on-cost spread over the market cap rate is the value being created, and the sensitivity shows whether the deal survives a worse exit. A committee that believes those two numbers is most of the way to yes.
Who Reads It — and What They Skip To
Committee composition varies — partners, the CIO, asset management and capital markets heads — but the reading pattern is consistent. Most readers go straight to the returns table and sensitivity grid, then to risks and mitigants to test whether the team is honest about the weak points. The market section gets skimmed and challenged out loud. Write for that reader: every number should reconcile to the model — one stale figure costs the memo its credibility.
How Teams Handle This Today
Usually the night before committee: the model is done, so an analyst copies outputs into a document template — retyping the returns table, screenshotting sensitivity grids — then repeats it all when an assumption changes at 9 p.m. The classic failure is a memo that no longer matches its model. With Playgrounds, the memo generates from the same data the underwriting runs on, so a late change flows into the document instead of triggering a rewrite.
Frequently Asked Questions
What does IC stand for?
Investment committee — the group with authority to approve acquisitions, dispositions, and major capital decisions. The IC memo is what puts a deal in front of that group.
How long is a typical IC memo?
Anywhere from five to forty pages, depending on the firm and the deal. Most teams keep the executive summary to a page and push supporting detail — full cash flows, comp sets, photos — into appendices.
How is an IC memo different from an offering memorandum?
An offering memorandum is a selling document from the listing broker. An IC memo is an internal buying document — its job is to test the OM's claims and present the deal on the buyer's own assumptions.
When is the IC memo written?
Late in due diligence, once underwriting has settled — typically days before the committee meets. Many firms also use a shorter screening memo earlier to decide whether a deal deserves full pursuit.
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