Pro Forma

A pro forma is a projection of future financial performance based on assumptions rather than actual results. In real estate it's most often used for projected income and expenses, but the term applies to any forward-looking estimate, whether that's rent, expenses, or overall returns.

Example

A T12 might show $1,060,000 in operating expenses. A pro forma for the same property might project $1,010,000 after a management change. The pro forma number is an assumption, and it's only as good as the case behind it.