May 20, 2025 • General
If you’re thinking about buying or selling a commercial property—whether it’s a retail strip center, office building, or industrial space—there’s one document that plays a big role in evaluating the deal: the rent roll.
For investors, lenders, and brokers, the rent roll acts like the heartbeat of the property. It gives a clear snapshot of who the tenants are, what they’re paying, and how stable the income really is. Let’s break it down in plain terms.
What Is a Rent Roll?
A rent roll is a detailed report that outlines the income-producing side of a commercial property. Think of it as a list of all tenants along with lease details that impact the property’s cash flow.
Most rent rolls include:
- Tenant names
- Suite or unit number
- Lease start and end dates
- Monthly rent
- Security deposit held
- Additional charges (e.g., CAM fees or reimbursements)
- Rent escalation schedule (if applicable)
- Vacancy status
If a building has multiple tenants—like a small shopping center or office complex—the rent roll lays out exactly what income is being generated from each space.
Why Rent Rolls Matter
1. Evaluating Cash Flow
A rent roll tells you how much rental income is being collected right now, and how reliable it is. Investors and lenders use this information to calculate Net Operating Income (NOI) and determine whether the property can support its operating expenses—and a mortgage.
2. Assessing Tenant Risk
Are the tenants long-term, established businesses? Or are leases short, with potential for turnover? The rent roll helps buyers understand how stable the income stream is. A property fully leased with staggered expiration dates is generally more desirable than one with all leases ending at once.
3. Verifying Lease Terms
The rent roll should match what’s written in the actual leases. Buyers typically review both to make sure nothing is misrepresented. For example, if a rent roll says a tenant is paying $3,000/month but the lease says $2,500, that’s a red flag.
4. Forecasting Future Income
Some leases have escalation clauses, meaning the rent increases at set intervals. These increases are usually reflected in the rent roll and help project future income and property value. Understanding when rent bumps kick in can affect purchase price and financing decisions.
5. Supporting the Property Valuation
Appraisers and lenders rely on the rent roll as part of the underwriting process. It supports the property’s valuation by confirming what the asset actually earns. A clean, current rent roll strengthens your negotiating position whether you’re buying or selling.
When You Should Ask for a Rent Roll
If you’re:
- Buying a commercial property — request it early in due diligence
- Selling — have it ready and accurate before listing
- Refinancing — your lender will require it
- Managing — use it to track lease expirations, increases, and tenant health
Final Thoughts
Whether you’re an experienced investor or looking at your first commercial deal in Amarillo, don’t overlook the rent roll. It’s one of the simplest yet most powerful tools for analyzing a property’s income potential and stability. A clear, updated rent roll not only builds buyer confidence—it can make or break a deal.
Need help reviewing a rent roll or evaluating a property in Amarillo or the surrounding area? Reach out to Wellborn Real Estate. Our team can guide you through the numbers and help you invest with confidence.