Rent Roll

The rent roll is arguably the most important document an investor reviews when evaluating a commercial real estate acquisition. It provides a granular, tenant-by-tenant breakdown of the property's income stream, allowing the buyer to verify the income claims made in the offering memorandum or marketing package. A well-maintained rent roll includes unit identifiers, tenant names, lease commencement and expiration dates, base rent, escalation schedules, security deposits, and any concessions or free rent periods.

During due diligence, investors cross-reference the rent roll against actual lease documents, bank deposit records, and historical operating statements to verify accuracy. Discrepancies between the rent roll and supporting documents are red flags that warrant further investigation. Key things to look for include upcoming lease expirations (rollover risk), tenants paying below market rent (upside potential), tenants paying above market rent (downside risk if they vacate), and concentration risk (a single tenant representing too large a share of total income).

The rent roll also informs value-add strategies. If a property has significant below-market rents, the new owner can project income growth through lease renewals at higher rates. Conversely, a rent roll showing rents already at or above market indicates limited organic growth potential. Lenders rely heavily on the rent roll when underwriting loans, and many will require a certified rent roll as a condition of closing.