Operating evidence and financing
What this package helps you examine
Retail underwriting should connect the rent roll to the conditions that allow tenants to keep paying that rent. An anchor closure, sales decline or delayed opening can affect several leases at once. The financing package should show which rents are fixed, which are contingent, and which costs return to the landlord when occupancy changes.
Separate the revenue streams
Model base rent, percentage rent, reimbursements and other income separately. Support percentage rent with the actual lease formula and reported sales periods rather than assuming a recurring percentage of total sales. Show concessions, arrears and settlement payments distinctly. Security deposits and prepaid rent should not become recurring income merely because they appear in bank deposits.
Trace contractual contagion
Read co-tenancy, go-dark, exclusivity, termination and operating provisions in complete leases and amendments. An anchor event can create different responses for different tenants; do not apply one generic haircut to the entire center. Use counsel to identify the actual trigger and remedy, then model the resulting rent and cost changes. Brixmor's issuer disclosure illustrates these risks but does not interpret the subject leases.
Budget the path to opening
Distinguish delivery of landlord work, tenant possession, permit readiness, store opening and rent commencement. Improvements and commissions may be due before the new tenant pays rent, while a loan holdback may reimburse only after later evidence. Build a dated ledger for those events. A projected stabilized rent roll is incomplete until the capital and operating carry needed to reach it are funded.
Use the workbook
- Use Assumptions!D5 for Base (1) or Downside (2), and the labeled scenario input rows. Enter source data in Lease Schedule!D10:L12; preserve formula cells and an untouched workbook copy.
- Use the Lease Schedule for tenant cohorts and inspect the separate percentage-rent and hypothetical co-tenancy adjustments. The workbook does not determine whether a lease remedy is legally triggered.
- Reconcile Operations to Summary. Apply the entered lender adjustment separately to the modeled cash flow. Sizing uses amortizing debt service, while first-year payments reflect the entered interest-only period.
- In Assumptions, replace illustrative value, LTV, DSCR, debt yield, rate, amortization and requested ceiling with the intended scenario. Review capacities in Debt and Funding. The smallest modeled capacity does not establish eligibility or approval.
- Closing equity includes the entered opening cash and restricted reserves. Additional operating cash need is measured after that opening cash, so do not add it twice. Inspect monthly cash and remaining principal at maturity.
- Read Review for model conventions and limitations. Save each scenario with its supporting evidence and date; actual lender definitions, legal rights and professional findings control the transaction.
Questions to prepare for a lender
Which lease changes when an anchor closes?
Tenant-by-tenant clause register with counsel-confirmed triggers and remedies.
How much percentage rent is repeatable?
Lease formula, sales certifications and a multiyear payment bridge.
Are recoveries collectible after vacancy changes?
Expense-recovery clauses, caps and current reconciliation statements.
What evidence starts rent?
Delivery conditions, acceptance, permits and commencement documentation.
Who funds leasing work before reimbursement?
Contractor and commission obligations, draw conditions and verified bridge liquidity.
Can the center carry a prolonged vacancy?
Monthly lost-rent, returned-expense and re-leasing cash scenario.
03 / Prepare
Build the evidence file
Use this as a preparation checklist. The lender determines the documents, definitions and review conditions for the actual transaction.
Cash flow and operations
- Current tenant roll with base, percentage and recovery income separated.
- Complete leases and amendments, including co-tenancy and operating clauses.
- Tenant sales reports and percentage-rent calculations where applicable.
- Collections, arrears, abatements and settlement history by tenant.
- CAM reconciliations showing landlord share, caps and exclusions.
- Operating expenses supported by taxes, insurance, utilities and service contracts.
Property and collateral
- Site plan, rentable areas, parking, access and shared-maintenance obligations.
- Title, reciprocal easement and other recorded operating agreements.
- Condition assessment with roof, paving, signage and building-system costs.
- Use restrictions, exclusivities and permissions for proposed replacement tenants.
- Environmental reports and open remediation or monitoring conditions.
- Tenant-work schedules with landlord delivery and opening dependencies.
Sponsor and execution
- Sponsor retail leasing and repositioning track record with comparable centers.
- Ownership, borrowing authority and guarantor documentation.
- Liquidity evidence net of committed improvements and other project obligations.
- Leasing and management agreements with scope, fees and termination terms.
- Tenant concentration and related-tenant exposure analysis.
- Equity authorization for both the base plan and the downside lease-up period.
Closing and funding
- Estoppels and requested assignment, consent or nondisturbance documents.
- Signed improvement and commission obligations tied to payment dates.
- Holdback release tests identifying acceptable completion and occupancy evidence.
- Insurance and tax escrow requirements included in uses.
- Payoff and collateral-release requirements for existing debt.
- Closing-to-opening cash schedule with responsibility for every unfunded item.
Watch for these assumptions
- A contractual co-tenancy remedy is not necessarily triggered by the simple fact of physical vacancy.
- Percentage rent should not be counted again inside another sales-based revenue assumption.
- A reimbursement deposit does not fund work that must be paid before the deposit can be released.
- Replacing one tenant may require consent or resolve an exclusivity issue before the projected use is feasible.
- Lower first-year TI and leasing-commission spending caused by delayed occupancy is not a cost saving. Obligations scheduled after month 12 fall outside this forecast and require separate funding analysis.
Before you rely on the result
- Resolve clause triggers before finalizing the rent-loss scenario.
- Reconcile landlord work, tenant work and lender-eligible work without duplicate costs.
- Establish the temporary funding source before agreeing to a delivery date.
Scope and limitations
- Educational analysis; not a financing offer, appraisal, legal opinion or program eligibility determination.
- Workbook figures and thresholds are illustrative editable assumptions, not current lender quotes or universal underwriting standards.
- Document requests depend on the lender, transaction, jurisdiction and property; address unresolved issues with the relevant qualified professional.
Sources and applicability
These references support the stated asset and risk context. The questions and document lists are preparation tools, not a statement that every lender requires or accepts the same package. Actual contracts, applicable rules and the chosen lender determine the transaction requirements.
- Brixmor — 2025 Form 10-KItem 1A, tenant obligations and anchor occupancy risk · Checked 2026-10-21Issuer-specific risk disclosure, not an interpretation of subject leases.