For investment real estate. This is one of the first documents the lender will want to see to gauge their appetite and interest in providing financing. The lender will look closely at the following information:
1. Who are the tenants? - This is important to the lender because they want to understand how stable the companies are who are leasing space. Are they national credit tenants or mom and pop shops? How long have they been at the location and paying rent? Does their business pose any environmental issues? Is their industry strong and stable? Most lenders will be more concerned with the anchor tenants, but if each are leasing a similar amount of SF then they will take each into careful consideration.
2. Rents - Are the tenants paying current market rents? Why or why not? The rent roll will typically have a spot to enter in the SF of each unit. The lender will use this to determine if the tenant is above or below market rents.
3. Lease Terms - How much remaining time does each tenant have on their lease? If the borrower is looking for long-term financing, the lender will most likely require a current long term lease. If there is an anchor tenant, they will typically require their lease to at least be as long as the fixed term on the loan. Also, there may be a spot to indicate whether the leases are NNN, Gross, etc...
4. Total Income - This information will help the lender determine a debt service coverage ratio (DSCR). The lender will also request income and expense statements so they can get up to date expenses on the property to be able to determine the DSCR.
5. Vacancies - If there are current vacancies, they need to be listed on the rent roll. The lender will probably want to know how long the units have been vacant and if you are in current negotiations to fill it.
6. Options - Does the tenant have any options to renew their lease? If so what are the terms?