Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Rent Roll

A review of a current rent roll is a logical starting point when analyzing a project. Please refer to Exhibit A.1 in the companion website, located at www.wiley.com/go/wealthopportunities, which illustrates a comprehensive rent roll for the Diamond Medical Center. The rent roll not only sets forth the Base Rent, but also indicates, among other things, operating expenses paid by tenants as well as the dates of the next rent increase and of lease expirations.

A review of the rent roll leads to several conclusions about our hypothetical fact situation:

• The Rent Roll is “As of November 1, 2007.” This date becomes important as it relates to the financial information, for example, rent escalation dates and expense charges over base year.
• The medical building is a multitenant project.
• The project is 100 percent leased.
• There are staggered lease terms with the largest concentration of maturing leases in 2010.
• Approximately one-third of the tenant leases expire in 2010.
• The ground floor surgical center is the main tenant occupying about 17 percent of the building by size and 22 percent of the total revenue.
• The lease type varies significantly from triple net for the surgery center to modified gross for Jones Pharmacy, Inc., Healthcare Associates, Inc., Dr. Payne, Tom Murphy, Dr. Patterson, and The Nip/Tuck Plastic Surgeons to full-service gross leases for Dr. Orr, Dr. Lumer, Walter & Fritz, Alfred P. Shrink, Oncology Associates, Inc., Dr. Tooth, and Dr. Surgery. Both Children's ...