S&U: Sources and Uses in Commercial Real Estate

What is S&U in Commercial Real Estate? 

A S&U, or sources and uses statement, is a document that shows where the funding for a commercial real estate project is coming from-- and how that capital is used. For S&U statements, the combined sources of funds needs to exactly match the combined uses of funds. 

On a typical S&U statement, sources of funds might include funding from loans, equity from investors, and any net operating income (such as rental income) from the project. In contrast, uses of funds usually includes the purchase price, any construction or rennovation costs, acquisition costs, and the project's annual debt service.

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For example, in the S&U statement above, sources of income include a new loan, and owner equity, and the uses include purchase of property, escrows, and loan costs. 

If, after creating an S&U statement, the use of funds is higher than the sources of funds, a new category will be added titled "additional equity required." However, if the sources of funds is larger than the uses of funds, a category will be added called "cash flow distribution."


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