| Detail | Explanation |
|---|---|
| Shows | In-place rent and occupancy on a stated date |
| Typical fields | Unit, tenant, square feet, lease start and end, rent, deposit, balance owed |
| Compared against | Leases, T12, bank statements, estoppels |
| Used for | Underwritten income, rollover risk, loan sizing |
| Should be | Current, dated, and certified by the borrower when the lender asks |
What should a commercial rent roll include?
- Unit or suite number, unit type, and square footage
- Tenant name, or vacant, down, model, or employee unit where applicable
- Lease start date, expiration date, and any renewal options
- Current contract rent and scheduled increases
- Recoveries or reimbursements for commercial tenants, such as taxes, insurance, and common area charges
- Security deposit, concessions, and any free rent still in effect
- Past-due balances and move-in or move-out notices
- Market rent for comparison on multifamily and self-storage
How lenders use a rent roll
The rent roll gives the lender in-place income. The lender then adjusts it. Vacant units get no rent, tenants in default or with large past-due balances may be excluded, and leases that expire soon may be underwritten at market rent or with downtime. The result feeds net operating income, which drives the DSCR and debt yield tests.
For commercial property the lender also reads the lease expiration schedule. A large share of rent rolling in the same year as the loan maturity is a refinance risk, and lenders may respond with lower proceeds, a leasing reserve, or a cash sweep.
The rent roll is also where problems show up first. Rent that does not match the leases, tenants that are related to the borrower, or units listed as occupied that the inspector finds empty all damage the lender's confidence in the rest of the package.
Worked example: tying the rent roll to collections
In this hypothetical example, an 80-unit apartment property shows 76 units leased, or 95% physical occupancy. The rent roll's in-place rent totals $1,200,000 on an annual basis. The trailing 12 statement shows $1,110,000 of rent actually collected over the past year.
Collections equal 92.5% of in-place rent, leaving a $90,000 gap. A lender will ask what explains the difference, such as concessions, bad debt, turnover vacancy, or rent increases that took effect partway through the year. Underwriting usually follows the collected figure until the borrower shows why the higher in-place rent is now sustainable.
| Measure | Value |
|---|---|
| Units leased | 76 of 80 |
| Physical occupancy | 95% |
| Annualized in-place rent from rent roll | $1,200,000 |
| Rent collected, trailing 12 months | $1,110,000 |
| Economic occupancy | 92.5% |
| Difference to explain | $90,000 |
Preparing a rent roll for a lender
Export the rent roll from the property management system rather than rebuilding it by hand, date it, and make sure it ties to the operating statement for the same month. Commercial tenants' figures should match their leases and, when the lender requests them, their estoppel certificates.
Lenders on refinances and bridge loans often ask for updated rent rolls during the process and again near closing. Capital Partners reviews the rent roll against the operating history before a request goes to lenders. To start, submit the deal with a current rent roll and T12.
Common questions
What is the difference between a rent roll and a T12?
A rent roll is a snapshot of leases and rent on 1 date. A T12 shows actual income and expenses over the past 12 months. Lenders use both and expect them to reconcile.
How current does a rent roll need to be for a commercial loan?
Lenders typically want a rent roll dated within the last month or so, and they often request an update before closing. The lender's checklist sets the exact requirement.
Do lenders verify the rent roll?
Yes. They compare it with leases, bank statements, the T12, estoppels, and the site inspection. Discrepancies usually lead to lower underwritten income or more questions.
What is economic occupancy?
Economic occupancy compares rent actually collected with the rent that would be collected at full contract or market rent. It captures concessions, bad debt, and vacancy that physical occupancy does not show.
Send this deal to a principal
Share the basics now. A principal responds within 1 business day, and you can send the full package after the first conversation.