1. A computer-implemented method of characterizing or modeling a reservoir, the method comprising: a. determining an upscaled permeability along an x-axis for coarse cells; b. calculating by a processor a transmissibility along the x-axis for the coarse cells; c. calculating the transmissibility along the x-axis for fine cells; d. calculating transmissibility multipliers along the x-axis across the coarse cells, wherein each transmissibility multiplier along the x-axis is calculated by dividing the transmissibility along the x-axis across the fine cells by the transmissibility along the x-axis across the coarse cells; e. determining an upscaled permeability along a y-axis for the coarse cells; f. calculating the transmissibility along the y-axis for the coarse cells; g. calculating the transmissibility along the y-axis across the fine cells; h. calculating the transmissibility multipliers along the y-axis across the coarse cells, wherein each transmissibility multiplier along the y-axis is calculated by dividing the transmissibility along the y-axis across the fine cells by the transmissibility along the y-axis across the coarse cells; i. calculating the upscaled permeability properties along a z-axis for the coarse cells, wherein each permeability along the z-axis across the coarse cells is calculated by applying a harmonic averaging over non-zero permeability cells, wherein harmonic averaged permeability is calculated by dividing summation of a non-zero thickness by the non-zero permeability along the z-axis across the fine cells; j. monitoring the transmissibility multiplier along the z-axis across the coarse cells, wherein presence of a zero permeability value in the fine cell on either side of a boundary of the coarse cells results in a zero transmissibility multiplier along the z-axis across the boundary; k. calculating a transmissibility along the z-axis across the coarse cells, wherein the transmissibility along the z-axis across the coarse cells is calculated by utilizing the upscaled permeabilities from step (i); l. identifying successive fine cells connected above and below the boundary shared by two successive coarse cells; m. calculating the upscaled permeability along the z-axis for the coarse blocks identified in step (l); n. calculating the transmissibility along the z-axis across the coarse cells using the upscaled permeability calculated in step (m); and o. calculating the transmissibility multiplier along the z-axis across the coarse cells.