How to Write a CRE Offering Memorandum

Most offering memoranda are too long and front-load the wrong things. Here is a structure that answers a buyer's questions in the order they ask them.

Write for the two-minute skim first

A buyer's first pass through an offering memorandum takes about two minutes and answers one question: is this worth a real look? Everything that decision depends on belongs on the first two pages: asset type, location, price or guidance, in-place income, and the single strongest reason the deal exists.

A structure that works

  1. Executive summary. The investment in five bullets and one photograph. If a buyer reads nothing else, this has to be enough to get a call.
  2. Investment highlights. Three to five, each a claim with a number attached. "Below-market rents" is not a highlight; "in-place rents 18% below the submarket average" is.
  3. Property overview. Year built, size, parking, construction, recent capital work, condition.
  4. Financial summary. In-place and pro-forma, with the assumptions stated plainly. Buried assumptions get found in diligence and cost you credibility at the worst moment.
  5. Tenancy. Rent roll summary, lease expiry profile, tenant credit where it is relevant.
  6. Market overview. Short. Buyers in your market already know your market.
  7. Process and contacts. How offers are to be submitted, by when, and to whom.

Three things that lose deals

  • Pro-forma presented as fact. Label it. Every experienced buyer will check, and the ones who catch you stop trusting the rest of the document.
  • Photography that hides the asset. Wide exterior shots at dusk are fine; twelve of them instead of a floor plan is evasion.
  • No stated process. If a buyer cannot tell how to bid, some will not.

What the offering memorandum should not carry

Leases, environmental reports, and the full rent roll do not belong in a document you email. They belong behind the confidentiality agreement, released in stages, where you can see who opened what. That also keeps the memorandum short enough to be read.

Version control

The moment a memorandum is emailed as an attachment, you lose the ability to correct it. A hosted, branded version at a stable link means a price change is one edit rather than forty apology emails, and it tells you who is still reading.