The Mortgage Industry Standards Maintenance Organization is proposing a standard for the maintenance and sharing of commercial and multifamily real estate rent-roll information. It is designed to support all types of income-producing property, including office, industrial, retail, multifamily, assisted living, self-storage, mobile home parks and hotels.
The standard includes 87 fields of property and financial data as well as an easy way to maintain and share the data through widely used, secure technology.
Basic information such as tenant names and types of tenants, contract rents amounts, lease start and end dates, unit numbers and square footage, is essential to analyzing the value of commercial real estate. A property's income is determined by adding up all the rental payments received from the tenants and deducting operating and capital expenses. And the income is used to value a property and determine how highly leveraged it is.
Yet it is not always available to portfolio lenders and end investors.
Even Regulation AB II, which mandates disclosure of all kinds of loan-level information for commercial mortgage bonds, does not require disclosure of rent rolls.
Jim Flaherty, chairman of the working group that developed the standard, said that standard access to this kind of information will benefit CMBS investors.
"Unlike rating agencies and B-piece buyers, who get full rent rolls during the offering process, CMBS Investors do not currently get rent rolls in useable formats," said Flaherty, who is also chief executive of CMBS.com. "CMBS investors need rent roll data to accurately assess collateral value and, therefore, the value of the bonds."
"In a typical CMBS, investors only receive limited information about a few of the biggest tenants. A prospectus will say how much space is leased and when the lease ends, but they don't even provide the rent."
Industry members and the public are invited to comment on the draft standard; final adoption is expected in February 2017 at a commercial real estate conference of the Mortgage Bankers Association in San Diego.