Rent Roll
A list of tenants in an income producing real estate asset and the property owners’ reflection of all the rental income derived from the tenants at a specific time (usually at the end of the month). The rent roll often includes other information related to the tenants, such as a description of the space being rented, lease start/expiry dates and any security deposits held.
Putting ‘Rent Roll’ in Context
Sierra Crest Capital’s Acquisition of Silver Ridge Office Park
In mid-2024, Sierra Crest Capital, a real estate private equity firm, identified an opportunity to acquire the Silver Ridge Office Park, a 120,000-square-foot suburban office property in Reno, Nevada. The property, constructed in 2010, had maintained strong tenant demand due to its modern design, ample parking, and proximity to Reno’s growing technology corridor.
Sierra Crest Capital classified this investment as a Core-Plus acquisition due to its relatively stable occupancy of 92% but with some potential to increase value through leasing the remaining vacant space and renegotiating below-market leases. To support their underwriting and ongoing asset management, Sierra Crest relied heavily on the property’s Rent Roll — a critical document that lists all current tenants, their leases, rental obligations, and other key lease data.
How the Rent Roll Was Used in the Acquisition Process
1. Due Diligence and Lease Review
During the due diligence phase, Sierra Crest Capital received a copy of the Rent Roll as of June 30, 2024, from the seller. This document allowed Sierra Crest’s acquisitions team to analyze the property’s income stream. The Rent Roll for Silver Ridge Office Park included the following key information for each of the building’s 14 tenants:
- Tenant Names: Each tenant’s legal name (e.g., TechFront Solutions LLC, Silver Health Medical Group, etc.).
- Suite/Unit Numbers: The specific office suites occupied by each tenant (e.g., Suites 101-102, Suite 203).
- Square Footage: The total rentable square footage (RSF) leased by each tenant. For example, TechFront Solutions leases 15,000 SF in the building.
- Lease Start and Expiration Dates: The start and end dates of each tenant’s lease.
- Monthly Rent: The rent that each tenant pays on a monthly basis.
- Annual Rent: The annualized rent for each tenant, which can be derived as:
Annual Rent = Monthly Rent x 12
- Lease Escalations: The schedule for annual rent increases (e.g., 3% annual increases each January 1).
- Security Deposits: The amount of the security deposit held by the landlord for each tenant.
This information allowed Sierra Crest to answer key questions, such as:
- How stable is the income stream? (Review lease expirations and rollover risk)
- Are any tenants paying below-market rents? (Identify lease rates relative to market comps)
- How soon will leases need to be renewed? (Examine near-term expirations)
Sample Rent Roll (Simplified)
| Tenant | Suite | Square Feet (RSF) | Monthly Rent | Lease Start | Lease End | Rent Escalation | Security Deposit |
|---|---|---|---|---|---|---|---|
| TechFront Solutions LLC | 101-102 | 15,000 | $22,500 | 6/1/2021 | 5/31/2026 | 3% Annually | $20,000 |
| Silver Health Medical | 203 | 10,000 | $17,000 | 4/1/2022 | 3/31/2027 | 2% Annually | $25,000 |
| Horizon Legal Services | 305 | 8,000 | $12,000 | 8/1/2023 | 7/31/2028 | 3% Annually | $18,000 |
| Lake Tahoe IT Consulting | 401 | 20,000 | $35,000 | 1/1/2020 | 12/31/2024 | 0% (Flat) | $50,000 |
| Northern Edge Marketing | 102 | 5,000 | $8,000 | 10/1/2023 | 9/30/2026 | 3% Annually | $10,000 |
How the Rent Roll Informed the Underwriting
With the Rent Roll in hand, Sierra Crest Capital used the data to build out a 5-year cash flow forecast. Here’s how the rent roll data influenced key underwriting assumptions:
- Rental Income Projections: By knowing each tenant’s rent and lease term, Sierra Crest could accurately forecast cash inflows for each year.
- Lease Renewal Probability: Sierra Crest modeled the renewal probability for tenants with expiring leases.
- Lease-Up Strategy for Vacant Space: Since the Rent Roll showed 8% vacancy, Sierra Crest included leasing assumptions for that space in its underwriting.
How the Rent Roll is Used Post-Acquisition
Once the deal closed, the Rent Roll became a key component of asset management. Each month, the Rent Roll was updated to reflect new leases, tenant move-outs, rent escalations, and security deposit changes. The Rent Roll provided real-time visibility into the property’s leasing status and flagged key dates for lease expirations and potential vacancies.
Sierra Crest’s asset managers monitored the Rent Roll to ensure they were prepared for lease renewals 12 months in advance. For example, knowing that Lake Tahoe IT Consulting’s lease expired in December 2024, the asset manager reached out to this tenant in early 2024 to negotiate a renewal. If no progress was made, Sierra Crest would prepare to list the space for lease with a local brokerage firm.
Key Takeaways
This hypothetical case of Sierra Crest Capital’s acquisition of the Silver Ridge Office Park in Reno, Nevada, highlights the crucial role of a Rent Roll. From acquisition to ongoing asset management, the Rent Roll provides a snapshot of the property’s leasing status, rental income, and key risk factors. By analyzing tenant lease expirations, rent growth, and renewal probabilities, Sierra Crest Capital was able to make a well-informed investment decision and maintain control over the asset’s cash flow.
With this case in mind, it’s clear that a Rent Roll is far more than just a list of tenants. It is a financial roadmap for both investors and operators, shaping the way cash flow forecasts, lease-up strategies, and renewal decisions are made.
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