Offering memorandum
The document sponsors send to prospective investors describing a syndication deal: the property, the market, the business plan, the financials, and the terms. Legally the marketing document for the offering.
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Part 1 of 4
Why a seller cares
If you sell a larger building through a broker, the offering memorandum is the marketing package buyers receive. If you invest in a syndicate after your sale, it is the document that describes what you are buying into.
Part 2 of 4
A simple example
Your broker prepares a 30-page offering memorandum on your twelve-unit building: rent roll, T-12, photos, the market, and an asking price.
| What is in it | What a buyer does with it |
|---|---|
| The rent roll and T-12 | Underwrites the income |
| The pro forma | Reads the assumptions with suspicion |
| The asking price | Starts from it, rarely ends there |
The OM is the building's story, told by the seller. Buyers check every number in it.
Part 3 of 4
What people get wrong
That the OM's pro forma is a promise. It is a projection, and the T-12 is the record it is checked against.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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