CRE 101 · deweyluong.realtor

Rent Roll and T-12 Explained: How to Read the Two Documents That Decide a Commercial Purchase Price

An offering package almost always leads with two numbers: the asking price and the NOI. That NOI is usually the seller's number, built from rent on paper and expenses from the seller's best year. Two documents decide which numbers are real. By Túy “Dewey” Luong, CCIM — Founding Broker, SERHANT. Atlanta · 318 closed sales / $281.2M career volume · 678-707-2498

The rent roll is the tenant-by-tenant snapshot: who rents each suite, at what contract rent, expiring when. The T-12 — the trailing-twelve-months operating statement — is the movie: what the property actually collected and actually spent, month by month, for the last twelve months. The rent roll tells you what the property should collect. The T-12 tells you what it did collect. The gap between the two, plus the work of normalizing the seller's expenses to a buyer's costs, is routinely worth hundreds of thousands of dollars on the purchase price. This page walks through how to read each document, a full reconciliation example, and the five places sellers polish hardest. The worked example uses made-up, rounded numbers to teach the mechanics. This page is general education, not investment advice.

The rent roll: a snapshot of the income structure

• Tenant name and suite size — so you can compute rent per square foot and compare it with the market.
• In-place (contract) rent vs market rent — the difference is loss-to-lease: upside if tenants pay below market, risk if they pay above it.
• Lease start and expiration dates — the most important field after rent itself. The expiration schedule tells you how much of the income can disappear in your first 12–24 months as owner.
• The rest of the contract: deposits, CAM or gross vs NNN structure, renewal options, and who is behind on rent (delinquency).
• Vacant space at market rent — in-place rent plus market rent on the empty suites is gross potential rent (GPR), the property's theoretical revenue ceiling.

Three first questions on any rent roll: (1) What date is it as of — older than 30 days, ask for a fresh one. (2) What percentage of the rent expires in your first year? (3) How much of the income is one tenant — a single tenant above roughly 30–40% of revenue is concentration risk, however strong the name.

The T-12: twelve months of what actually happened

• Collected rent vs rent on paper: real vacancy, slow payers, bad debt, and signing concessions all live in this gap — the rent roll cannot show them.
• Other income: CAM reimbursements, parking, signage — small lines that add up to effective gross income (EGI).
• Expenses by month: read monthly, not just as an annual total — one roof repair or one insurance step-up hides inside an annual column.
• The seller's own costs: an owner who self-manages books no management fee; family labor does the maintenance off the books; insurance rides on another property's policy. None of that is wrong — it is simply the seller's cost structure, not yours.

The core rule: never price a property off the seller's NOI. Take collected revenue from the T-12, normalize every expense line to the buyer's market cost, and price — and let your lender underwrite — off that normalized NOI.

Worked example. The numbers below are made up and rounded to teach the mechanics. This is not a real property.

• An 8-suite, 18,000 SF retail center in Gwinnett. The current rent roll: 7 suites leased, in-place rent totaling $19,750 a month ($237,000 a year); 1 suite vacant at $2,600 a month market rent, so GPR is $22,350 a month, $268,200 a year. Occupancy by suite count: 7 of 8, 87.5%.
• Rollover warning: three leases expire in the first 12 months, carrying $9,350 a month — 47.3% of in-place rent. Nearly half the income has to be renegotiated in year one.
• The T-12 tells a different story: rent actually collected over 12 months was $218,400 — $18,600, or 7.8%, below annualized in-place rent (a suite empty mid-year plus one chronic slow payer). Other income (CAM reimbursements) of $24,600 brings EGI to $243,000.
• The seller's expense book: taxes $28,900, insurance $9,600, CAM/utilities $18,400, management booked at $4,800 (self-managed), repairs $7,300 — total $69,000. Seller NOI: $243,000 − $69,000 = $174,000.
• Now normalize to the buyer: market management at 4% of EGI is $9,720 (a $4,920 increase); Georgia reassesses on sale, so taxes up an estimated 15% (+$4,335); a new insurance quote 20% above the expiring policy (+$1,920). Normalized expenses: $80,175. Normalized NOI: $243,000 − $80,175 = $162,825.
• The value gap: the offering prices off a pro forma NOI of $189,500, which at a 6.75% cap rate implies about $2,807,000. Normalized NOI at the same cap rate supports about $2,412,000. The difference is roughly $395,000 — what a buyer overpays for pricing off the seller's numbers.
• DSCR cross-check: a 65% loan on $2,412,000 is about $1,568,000; at an assumed 7.25% over 25 years, debt service is roughly $136,000 a year, so DSCR is $162,825 / $136,000 ≈ 1.20x — still below the common 1.25x lender floor, meaning the real maximum loan is a little smaller and the buyer needs more cash. Lenders also typically deduct replacement reserves ($0.30/SF × 18,000 SF = $5,400 a year) below the NOI line when they underwrite.

The five places sellers polish hardest

• Pro forma NOI in front, actual NOI in the appendix. The offering leads with the projected number (vacancy filled, rents raised); the real T-12 sits in the back. Always start from the T-12.
• Management fee at zero or a token amount. Self-management is the seller's arrangement. A buyer hiring a manager pays roughly 3–5% of EGI — add it before pricing.
• Taxes at the old assessment. In Georgia, a sale is a reassessment event. Your first-year tax bill is almost never the seller's last-year bill — see Property Tax Appeals for the 45-day window that follows.
• Insurance on an expiring policy. Georgia commercial insurance pricing moves hard; a flat insurance line across several T-12 years is usually an old policy about to renew much higher.
• A stale rent roll and stacked expirations. A rent roll dated three months ago may already have lost a tenant — and if nearly half the rent expires in year one, the "stable income" in the offering is stable only on paper.

The six-step reconciliation, before you make an offer

• Step 1: Annualize in-place rent from the rent roll and compare it with rent collected on the T-12. A gap of a few percent is normal; 8–10% or more needs a written explanation.
• Step 2: Build the expiration schedule by percentage of rent, not by suite count — one large suite expiring is more dangerous than three small ones.
• Step 3: Normalize every expense line: market management fee, post-sale taxes, a fresh insurance quote, and replacement reserves.
• Step 4: Price off normalized NOI at a market cap rate — and run the downside case (the largest tenant does not renew) before fixing your price.
• Step 5: Cross-check with DSCR at the expected loan. If DSCR is under the lender's floor, adjust price or cash now, in negotiation — not when the lender answers.
• Step 6: During due diligence, reconcile the rent roll against tenant estoppels and bank statements. The rent roll is the seller's statement; the estoppel is the tenant's own confirmation.

Cho nhà đầu tư người Việt

Khi một tòa nhà thương mại ở Gwinnett được chào bán, hồ sơ chào bán gần như luôn mở đầu bằng giá bán và NOI — nhưng NOI đó thường là con số của người bán, dựng từ tiền thuê trên giấy và chi phí của năm đẹp nhất. Hai tài liệu quyết định con số nào là thật: rent roll — bảng kê từng khách thuê, tiền thuê theo hợp đồng, ngày hết hạn — cho biết tài sản phải thu được bao nhiêu; và T-12 (báo cáo vận hành thực tế 12 tháng gần nhất) cho biết tài sản đã thực sự thu được bao nhiêu. Nguyên tắc cốt lõi: đừng bao giờ định giá bằng NOI của người bán — hãy lấy doanh thu thực thu từ T-12 và chuẩn hóa từng dòng chi phí về mức thị trường của người mua.

Trong ví dụ trên trang này: trung tâm bán lẻ 8 ô, 18.000 SF ở Gwinnett có tiền thuê tại chỗ $19.750/tháng ($237.000/năm), GPR $268.200/năm khi cộng ô trống theo giá thị trường, và 47,3% tiền thuê hết hạn ngay trong năm đầu tiên. T-12 cho thấy tiền thuê thực thu chỉ $218.400 — thấp hơn 7,8%; cộng thu nhập khác $24.600, EGI là $243.000. Chi phí theo sổ người bán $69.000 cho NOI $174.000, nhưng sau khi chuẩn hóa — phí quản lý 4% EGI thay vì tự quản, thuế tăng 15% vì Georgia định giá lại sau khi bán, bảo hiểm tăng 20% theo báo giá mới — chi phí chuẩn hóa là $80.175 và NOI chuẩn hóa còn $162.825. Ở cap rate 6,75%, chênh lệch so với NOI dự phóng $189.500 trong hồ sơ chào bán tương đương khoảng $395.000 giá trị. Bản tiếng Việt đầy đủ của chủ đề này có trên NhaDat Duluth: Rent roll và T-12 là gì? Đây là thông tin giáo dục chung, không phải tư vấn đầu tư.

Frequently asked questions

What is the difference between a rent roll and a T-12?

A rent roll is a snapshot on one date: every suite, who rents it, the contract rent, and when each lease expires. A T-12 (trailing twelve months) is the property's actual operating history for the last 12 months, month by month: rent actually collected, other income, every operating expense, and the resulting NOI. The rent roll shows the structure of the income; the T-12 shows whether that income is real. A buyer reads both together and reconciles them before pricing anything.

What is gross potential rent (GPR), and how is it different from in-place rent?

In-place rent is what current leases actually charge, annualized. Gross potential rent adds the vacant space at market rent, so it is the property's theoretical revenue ceiling if every suite were leased at market. In the worked example on this page, in-place rent is $237,000 a year and GPR is $268,200, because one vacant suite would add $2,600 a month at market. Pricing a property off GPR instead of collected rent is the most common way buyers overpay.

Why is the seller's NOI almost always higher than the buyer's normalized NOI?

Because the seller's expense book describes the seller's operation, not yours. An owner who self-manages books little or no management fee; property taxes are shown at the pre-sale assessment, even though a Georgia sale triggers reassessment; insurance is shown at a policy price that may be about to renew much higher. Normalizing means restating each line at the buyer's market cost: in the worked example, seller NOI of $174,000 becomes $162,825 after a 4%-of-EGI management fee, taxes up 15%, and insurance up 20% - and against the offering's $189,500 pro forma NOI, the value gap at a 6.75% cap rate is about $395,000.

What should I do if a seller will not provide a T-12?

Treat the refusal itself as information: an income property with no operating statement usually means the books do not exist, or the real numbers are weaker than the offering numbers. The standard response is to price off the rent roll with a conservative vacancy and bad-debt allowance, require bank statements and the property's tax returns during due diligence, and keep a termination right if the documents do not match the offering package.

Rent roll và T-12 khác nhau thế nào khi mua bất động sản thương mại?

Rent roll là ảnh chụp tại một ngày: từng ô thuê, khách nào đang thuê, tiền thuê theo hợp đồng bao nhiêu, lease hết hạn khi nào. T-12 là lịch sử vận hành thực tế 12 tháng gần nhất theo từng tháng: tiền thuê đã thu thật bao nhiêu, thu nhập khác, từng khoản chi phí, và NOI kết quả. Rent roll cho biết tài sản phải thu được bao nhiêu; T-12 cho biết đã thực sự thu được bao nhiêu. Trong ví dụ trên trang này, một trung tâm bán lẻ 8 ô ở Gwinnett có tiền thuê tại chỗ $237.000/năm nhưng T-12 chỉ thu thật $218.400 - chênh $18.600, tức 7,8%. NOI người bán công bố $174.000, nhưng sau khi chuẩn hóa phí quản lý theo thị trường (4% EGI), thuế tăng 15% sau khi bán và bảo hiểm tăng 20%, NOI chuẩn hóa chỉ còn $162.825. So với NOI dự phóng $189.500 trong hồ sơ chào bán, ở cap rate 6,75% khoảng chênh giá trị là khoảng $395.000. Bản tiếng Việt đầy đủ: nhadatduluth.com - bài 'Rent roll và T-12 là gì?'. Đây là thông tin giáo dục chung, không phải tư vấn đầu tư.

This page is general education, not investment, legal, tax or financial advice. Every figure in the worked example is made up and rounded to teach the mechanics; expense adjustments, the cap rate, and loan terms shown are illustrative assumptions, not market quotes for any specific property. Túy “Dewey” Luong, CCIM — Founding Broker, SERHANT. Atlanta · 678-707-2498 · dewey.luong@serhant.com