Offering memorandum review: reconcile the OM, rent roll and T-12

An offering memorandum can give an acquisitions team its first view of a property. It can also place historical results, current rents and projected performance next to each other. Before those figures become model inputs, the reviewer needs to identify what each number represents and which document supports it.

This worksheet is for reviewing the financial information in a property-sale OM. Its output is a record of verified inputs, explained differences and open questions. It does not assess the legal terms of a securities offering or determine whether to buy a property.

Start with a document register

Save the OM, rent roll and trailing twelve-month operating statement as separate source files. Record the version received, the date of receipt, the property covered and the period or reporting date shown inside each file. A filename alone may not identify the period being reported.

Confirm that the files cover the same asset. For a portfolio, check whether a summary includes every property or only a subset. Note the currency, units and accounting basis where stated. Keep a missing document visible rather than filling its place with an assumption that looks like a verified fact.

A useful register has five columns: document, reporting date or period, version, source location and outstanding question. Keep references to individual pages, worksheets or rows when you extract figures.

Separate the three views of income

A current rent roll is a snapshot. A T-12 is a record covering twelve months. An OM pro forma describes a projected case. They answer different questions, so their totals should not be forced to match.

For example, multiplying a current monthly contractual rent total by twelve produces an annualized snapshot. It does not establish the rent collected during the preceding year. Changes in occupancy, lease commencement dates, concessions and arrears may help explain the difference, but each explanation needs supporting evidence.

Use a separate column for each basis. Label a figure as historical, current contractual or projected before comparing it with another figure. Where the source uses a term such as effective rent, record its stated definition instead of assuming that every file uses the term identically.

Build a reconciliation worksheet

The following is a suggested review format. Adapt the fields to the property type and the documents available.

Item	Compare	Evidence or explanation to retain
Property scope	OM asset description against the properties, units or suites in the supporting files	Included assets and any exclusions
Rental income	OM historical income against the corresponding operating-statement period	Source rows and differences in classification or timing
Current rents	Rent-roll entries against available leases and amendments	Rent basis, effective date, concessions and unresolved exceptions
Other income and recoveries	OM categories against statement detail and available supporting schedules	Account mapping and any amounts included in more than one category
Operating expenses	OM historical expenses against the same period in the statement	Items omitted, reclassified or presented as adjustments
Projected changes	OM pro forma against its stated starting point	Separate assumptions for rent, occupancy, expenses and timing

Cross-checking income against underlying records is also part of the FDIC's commercial real estate loan-review examination module, which discusses comparing reported rent-roll income with tax-return income or individual lease terms. That is banking examination guidance; the worksheet here is a practical preparation aid, not a claim of regulatory compliance.

Explain changes instead of overwriting the source

Keep the OM figure, the supporting-document figure and the team's selected model input in separate fields. Add the reason for any adjustment and the person responsible for approving it. This preserves the distinction between a transcription correction, a reconciled historical number and an underwriting assumption.

If the OM presents an expense as nonrecurring, retain that classification as the seller's position until the reviewer has examined the support. Do not silently remove it from historical results. If the team chooses a different future expense assumption, show that choice in the projected case.

Recalculate displayed subtotals from their components where possible. Keep operating income separate from debt service and capital spending, and document how the source treats reserves and other adjustments. A matching total does not settle a disagreement about what belongs inside it.

Turn unresolved differences into specific requests

An exception log should help someone obtain the missing evidence. Give each issue an identifier, the two figures or statements that disagree, their source references, the question to resolve, an owner and a status.

For example: “The OM historical rental-income total differs from the supplied T-12 total. Please confirm the period used in the OM and provide the account mapping or adjustment schedule.” This asks for the evidence needed to reconcile the figures without presuming that either source is wrong.

Use distinct statuses such as awaiting evidence, explained, corrected and accepted assumption. Keep the supporting response with the issue. A request being sent is not the same as the underlying number being verified.

Define the handoff to the investment team

The completed preparation pack should include the source register, reconciliation worksheet, selected inputs and open exceptions. Identify which unresolved items affect the current analysis. When a replacement file arrives, compare it with the prior version and revisit the affected inputs before releasing a revised pack.

AI can assist with extraction and drafting questions, but a reviewer still needs to check source references, arithmetic and the treatment of differences. Start with the AI document processing guide when designing those extraction checks. Give a service partner the same scope, evidence requirements and acceptance criteria that an internal preparer would receive.

Scope the support around the deliverable

Leni's deal flow and diligence support includes screening briefs, underwriting work and diligence trackers. Agree the source files, required output and review responsibilities at the start. A named specialist prepares and checks the agreed work; the investment team retains the decision.

For firms building a recurring process, Leni's own-your-AI platform brings supported company data and knowledge into workflows using compatible models. Scope the connections, access and review rules for your organization. Begin with a reconciliation pack the team can inspect and reuse.