Rent Roll: Fill & Download for Free

YES. Higher interest rates result in:More expensive financing. The cost of an investor's leverage will go up.Slower growth of rent rolls on CRE investments as tenants (businesses/individuals) see slowing wage growth and are required to allocate more available cash flow towards paying interest on debt.Both of these factors (higher cost of financing, reduced cash flows on the real estate) reduce the attractiveness of a commercial real estate investment. The only way for investors to find deals appealing and keep their returns looking attractive is to pay less for the property in the first place.

Landlords, particularly large corporate real estate investment companies, are holding out for unicorns — mainly to improve property value for their lenders or to a buyer.(image: Louis Vuitton — they want their property to look like this)(image: a TV prop liquor store — they do not want this)They are hoping for a chain store, hopefully a high class one with Triple-A credit signing a 10–20 year lease that will take good care of the facilities, spend lots of money on improvements, attracts desirable customers, and does not bring noise, disruption, smells, crime, insurance risks, or vermin to the building. It’s worth going without rent for a year or two if you can land a CVS drugstore or Starbucks or Louis Vuitton.You know what’s worse than having an empty building? Having a bad tenant. One that stops paying but takes a year to evict. Or one that causes a fire, or flood, or cockroach infestation.Banks are a primary culprit here. Most real estate is purchased on credit. Lenders, when approving loans and setting interest rates, look at the “rent rolls” — how much gross rent the property is collecting per month — to make sure the borrower is able to service the loan, and by extension, how much money they are willing to lend. They apply a “vacancy factor” to account for the possibility that a tenant will leave and the landlord will have to pay a broker to find a new tenant, and have a period without rent. The vacancy factor, and overall loan score, will be a lot better if there is a long-term lease from a national credit-rated tenant. A buyer, when deciding how much money to offer for a building, will in turn think through how much of a loan the building will support.In fact, there is a form of flipping where a buyer offers a low price for a building that is vacant or has mostly month-to-month commercial tenants, clears out the old businesses, rents to a chain at a higher rate, and then quickly resells the building for more money to a real estate investment company.Around 2002 I was looking to invest about $2 million into a commercial property. My realtor gleefully showed me a bunch of freestanding buildings in strip malls throughout California, these are crappy buildings without much to them but offer very good “cash on cash” rent relative to the purchase price. One of the buildings he showed me was 100% occupied by a… wait for it…(image: Blockbuster Video!)Yes, there was about 12 years left on a 20 year lease, with two ten year extension options. Rent was solid, and Blockbuster’s owners, Viacom, had great credit and paid rent consistently on time. It was a turnkey operation, I didn’t need a property manager, I could just collect my money and visit once a year to make sure it was still there. I’d be set for life, or at least until late middle age.By 2002 it was clear that video rentals were not a stable industry, so I politely declined. Viacom divested itself of Blockbuster in 2004 and the company has since shut down all of its stores. If I had bought this building I would have a vacant unimproved building in a small town strip mall, I’d be lucky to find a pawn shop or discount store to pay 40% lower rent. A lease doesn’t do you any good if the tenant is bankrupt.

What you’re asking about is called a “rent roll,” which is a list of all the tenants in a building and typically includes their rental rates and lease dates.Rent rolls are private and proprietary information. Even when given to brokers and prospective purchasers, they often must sign a confidentiality agreement in order to obtain them.One potential source, however, may be the tax assessor’s office. When property taxes are challenged, the owner will submit a certified rent roll in order to prove the income of the property upon which a tax is based. Once submitted, that becomes public information available to anyone through a Freedom Of Information Law (FOIL) request.