CRE
How to Read a Rent Roll, With a Worked Example
By Khai Tran · · 6 min read
Read the rent roll for occupancy, lease dates, base rent, reimbursements and payment issues. Then compare it with the leases and operating records.
A rent roll gives you a starting point for reviewing property income. Work through it in a consistent order, then compare it with the leases, collections and operating records. You do not need to give an investor an answer before you have checked the documents.
Start With the Story Behind the Numbers
Before digging into formulas, remember that a rent roll tells a story: Who’s paying, how much, how reliably, and for how long.
Key questions to orient yourself
- What type of asset is this? (Retail, office, industrial, multifamily)
- How many tenants?
- Is the income stable or choppy?
- Are there immediate expirations?
This context will shape every decision downstream.
Identify the Core Columns That Matter Most
Rent rolls vary. Start with the fields below, and ask for missing information that affects the analysis.
The essential columns
- Tenant name
- Suite / unit number
- Lease start & expiration
- Base rent
- Square footage
- Rent per SF (or per unit)
- Additional charges (CAM, NNN, utilities)
- Current balance owed
- Security deposit
If one is missing, it’s worth asking the owner or broker why.
Verify Occupancy and Economic Vacancy
Physical occupancy and economic occupancy are not the same, and smart investors look at both.
Physical occupancy
Simply: How many units filled?
Economic occupancy
How much of the potential income is actually collected?
If a tenant is behind on rent, that shows up here. A building can be 100% physically occupied but only 85% economically occupied.
Understand the Lease Terms That Affect Value
A rent roll usually won’t include the entire lease, but it gives clues you need to investigate.
Look for
- Expiration cliffs (multiple leases ending within 6 to 12 months)
- Below-market rents that might be an upside story
- Above-market rents that might signal renewal risk
- Short-term leases in long-term assets
- Concessions or free rent
Any unexpected lease pattern should trigger a deeper look.
Calculate Actual Rent Per Square Foot
This is where many agents get mixed up. The rent roll often shows rent per month, but investors care about rent per square foot per year.
The simple formula
Annual Rent ÷ Square Footage = Rent per SF per Year
Example
- 1,200 SF retail suite
- Tenant pays $2,800/month base rent
Annual rent = $2,800 × 12 = $33,600 Rent per SF/year = $33,600 ÷ 1,200 = $28/SF/YR
Now you can compare that to the market.
Review Additional Income (CAM, NNN, Utilities)
In CRE, the base rent is just part of the income.
Common additional charges
- CAM reimbursements
- NNN reimbursements
- Utility pass-throughs
- Percentage rent (retail)
- Parking income
A strong rent roll clearly separates these so you can calculate true revenue.
Look for Under-Market Rents and Upside Potential
Treat a potential rent increase as an assumption to investigate.
Quick upside test
- Are current rents 10% to 20% below market?
- Are leases expiring soon enough to capture that?
- Are there value add opportunities (renovations, repositioning) that justify a rent increase?
Check the leases, comparable rents, likely costs and timing before relying on the projected increase.
Scan for Delinquencies and Payment Patterns
A rent roll should show arrears or tenant balances. Don’t skip this.
What matters
- Chronic late payers
- Large outstanding balances
- Tenants approaching default
- Any tenant paying partial rent
Even one struggling tenant can shift NOI more than you expect.
Build a Cash-on-Cash Snapshot (Hypothetical Example)
The figures below illustrate the calculation. They are not a current property offering or a loan quote.
Property example
- 5-tenant retail strip
- Total rentable SF: 10,000
- Annual base rent: $210,000
- Annual NNN reimbursements: $42,000
- Total income: $252,000
- Total annual operating expenses, including the costs covered by the assumed reimbursements: $48,000
- NOI: $204,000
- Asking price: $2,700,000
- Assume a loan equal to 65% of the purchase price; annual debt service is supplied separately for this example
Step-by-step
- Debt amount = 65% × $2,700,000 = $1,755,000
- Annual debt service (assumed, not a lender quote) = $137,000
- Cash flow = NOI − debt service = $67,000
- Down payment = $945,000; assumed closing costs and initial reserves = $55,000; total cash invested = $1,000,000
- Illustrative cash-on-cash = $67,000 ÷ $1,000,000 = 6.7%, before taxes and further capital spending
What you’d tell the investor
"Under these example assumptions, the cash-on-cash calculation is 6.7% before taxes and further capital spending. We need to verify collections, expenses, financing and cash required before relying on it for a decision."
Check the income, expenses and loan assumptions before using a summary like this with an investor.
What to Say When Reviewing a Rent Roll with an Investor (Script)
Use this simple script when walking an investor through a deal.
Rent Roll Review Script
“Let me walk you through the rent roll. We have ___ tenants with leases running through ___. Current rent averages ___ per SF, and market is around ___. Additional income from NNN/CAM adds ___. No major delinquency concerns except ___. The biggest thing to note is ___. Using these records and assumptions, the calculated NOI is ___. Here is what remains to verify, and how financing and capital needs would affect the cash-flow illustration…”
Keep the relevant lease pages and records beside you while reviewing the summary.
Final Check: Does the Rent Roll Match the OM and P&L?
Before giving the “green light,” confirm consistency.
Your quick checklist
- Does the rent roll match the offering memorandum?
- Does the P&L match the rent roll?
- Are lease expiration dates consistent across documents?
- Are any leases missing or miscategorized?
When documents disagree, investigate the difference. A rent roll can contain errors, too.
Finish With the Questions Still Open
List the missing leases, unexplained balances and assumptions that still need support. Those questions are part of the analysis, not a reason to rush an answer.
Download my free 10 CRE Terms Guide to strengthen your investor and client conversations.