Rent Roll Analysis

A rent roll is a snapshot, not a guarantee. Before a replacement property lands on an identification list, we pull the unit or suite-level detail and check it against lease files, and not only the seller's spreadsheet.

What a Rent Roll Actually Shows

A clean-looking rent roll can hide a lot. We look line by line for units on short-term leases, tenants paying below market with no increase scheduled, and any unit flagged as vacant that has been vacant for more than a few months, which usually signals a leasing or condition problem the seller has not mentioned.

We also check lease start and end dates against the stated term, since a rent roll pulled from an older property management system can carry stale renewal dates that no longer match the actual signed lease.

On Tennessee properties, we pay attention to how seasonal tenants, particularly retail and hospitality-adjacent tenants near tourist areas like Sevierville and Gatlinburg, are represented, since seasonal income patterns can distort a trailing rent roll if it is read the same way as a stable office building.

We also cross-check the rent roll date against the offering package date, since a seller sometimes markets a property off a rent roll that is several months old, and a lot can change in a few months, especially turnover and delinquency.

Lease Rollover and Concentration Risk

We build a simple rollover schedule showing how much of the building's income expires in each of the next few years. A property where forty percent of the rent rolls over in year one carries a different risk profile than one with staggered expirations, even if the trailing income figures look identical today.

Tenant concentration works the same way. A handful of large tenants driving most of the rent means the loss of one tenant has an outsized effect on cash flow, which matters for both the exchanger's return expectations and the lender's underwriting.

We also note where a rent roll depends heavily on one industry, since a building leased mostly to logistics tenants near a distribution corridor carries different exposure than one with a mix of local service tenants, and a downturn in one industry can hit a concentrated rent roll harder than a diversified one.

What We Flag on Every Rent Roll

Before we finalize an analysis, we walk the property against the rent roll where possible, confirming occupied units are actually occupied and matching unit condition against the rent being charged.

• units or suites with month-to-month tenancy
• rent significantly below or above the comparable market range
• concessions, free rent periods, or below-market renewal options
• collections gaps between billed rent and actual receipts
• upcoming lease expirations concentrated in a single year

Turning the Analysis into a Decision

Once the rollover and concentration picture is clear, we compare it against the exchanger's identification timeline. A property with heavy near-term rollover can still be a good buy, but it changes how the exchanger should think about reserve planning and lender covenants after closing.

We put this analysis in front of the exchanger before the identification deadline, not after, so it can actually influence which properties make the final list rather than becoming a post-closing surprise.

When two candidate properties look similar on price and cap rate, the rent roll detail is usually what separates them, and we make that comparison explicit rather than leaving the exchanger to guess which building carries less real risk.

How This Connects to the Rest of the File

The rent roll findings feed directly into the T12 financial review and the lender's underwriting package, so numbers do not have to be reconciled twice. We route the finished analysis to the qualified intermediary for the file record and to the exchanger's advisor for any debt replacement or income questions that come up.

Keeping the rent roll analysis consistent across the identification file, the lender package, and the closing statement also cuts down on last-minute questions in the final week before the 180-day exchange period runs out.

Common 1031 Exchange Questions

How far back do you check lease history?

We typically review current lease terms plus at least the last full year of turnover and renewal activity, which is usually enough to spot a pattern of concessions or unusual vacancy that a single snapshot would miss entirely.

What if the seller will not provide full lease files?

We flag that as a real diligence gap. A rent roll without the underlying leases available for spot-checking is a weaker basis for a purchase decision, and we tell the exchanger that plainly rather than softening it in the report.

Do you analyze rent rolls for both multifamily and commercial properties?

Yes, though the specific red flags differ. Commercial rent rolls get more scrutiny on lease term and tenant credit, while multifamily rent rolls get more scrutiny on concessions and collections.

Can rent roll problems affect the identification decision?

They can and should. A property with serious rollover or collections issues might still work for the exchange, but the exchanger needs that information before committing an identification slot, not after closing on a building with hidden problems.

Do you provide a written summary we can share with our lender?

We put findings into a straightforward summary that lenders are used to seeing, which speeds up underwriting instead of leaving the lender to build its own version from a raw spreadsheet, and we update it promptly if the rent roll changes before closing.

Ready to organize the exchange file?