01 / Understand
The financing decision
Does lease durability extend through debt maturity and fund a replacement tenant if needed?
Start with the lease and guaranty, not the sign on the building. Make a dated map of rent, tenant options, landlord obligations and loan maturity. Then build a second case for the time after the current tenant stops paying. This evidence map complements the existing balloon-exposure guide and does not treat a net-lease label as a credit rating.
Show landlord costs explicitly
Realty Income’s 2025 Form 10-K describes its net-lease business alongside property management and re-leasing work. For the proposed property, read roof, structure, capital and restoration provisions directly. Mark disputed responsibility as an unresolved exposure instead of assigning zero cost.
Sources: Realty Income — 2025 Form 10-K
Keep renewal and replacement distinct
Realty Income’s Q2 2025 supplemental separately reports leases to existing and new clients, vacancy months and lease incentives. Use that disclosure structure, not its portfolio results, to distinguish your renewal case from a replacement-tenant case.
Sources: Realty Income — Q2 2025 Supplemental
Align the remaining lease with the balloon
Create one calendar for lender maturity, tenant notice dates, early termination, renewal rights and guaranty expiry. Test the loan using the actual contractual rights and a supported alternative use. An unexercised option is a possible outcome, not committed rent.
A hypothetical decision
Hypothetical: tenant option after loan maturity
A loan matures before the tenant must exercise its next renewal option.
Compare a refinance based on only the committed lease term with a separate verified-renewal case. Include property carrying and replacement cash if the tenant declines. Ask prospective lenders how they treat the remaining term.
The takeaway: The borrower should resolve the timing gap in the financing discussion rather than treating a tenant-controlled option as certain income.
Dedicated to single-tenant and net-lease retail
Download your niche underwriting package.
Use this dedicated Excel workbook with its lender guide and document checklist. Read the workbook instructions, replace illustrative assumptions with your evidence, and keep the guide beside your analysis.
Model scope and limitations
Expiry month is the first month without the existing lease. Replacement possession begins after entered downtime; base rent starts after the additional free-rent months. Whole-month timing does not reproduce daily prorations.
Improvement and commission inputs are paid once at replacement possession. Only that month is used. Other capital follows its entered monthly schedule. Costs after month 12 are outside this cash horizon.
- All numerical values are illustrative; no market facts or lender approval are asserted.
- The twelve-month operating model omits taxes on investor returns and future refinancing costs except expressly entered items.
- Legal, licensing, environmental, engineering and lender-specific recognition require actual diligence.
Excel .xlsx · PDF .pdf · No email required. Preparation materials do not constitute a loan offer or a lender’s document requirements.
Package reviewed by Jason Taken ·
Next: gather your lender documents ↓Related core asset model
Compare the existing core workbook.
The scope below describes the related core asset workbook. The dedicated niche package above has its own instructions and limitations.
The existing Retail underwriting model can analyze supported rent, expenses and debt.
Model scope and additional analysis
It does not evaluate corporate credit, determine credit-tenant-loan eligibility or interpret a guaranty.
Prepare an additional schedule: Add a legal-obligor and critical-date schedule plus a separately costed replacement case.
Test property-level loan sizing · Check post-closing liquidity
Questions to prepare for a lender
Use these questions to organize a financing discussion. A lender sets its own credit requirements and determines which evidence applies to your transaction.
Who owes rent and who guarantees it?
Obtain executed lease and guaranty documents, entity identification and available financial evidence; separate a franchisee from its brand owner.
What survives vacancy or lease termination?
Ask counsel to identify repair, tax, insurance, restoration and environmental allocations, then cost the borrower’s supported obligations.
What funds the replacement period?
Prepare downtime, carrying costs, tenant improvements, commissions and available equity using property-specific evidence.
03 / Prepare
Build your document checklist.
Check off what you have. Your selections stay on this page while it is open; they are not sent to Jaken Finance Group or analytics.
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Print uses your browser’s PDF option. Checklist selections are for your preparation, not a lender’s completeness determination.
Continue the learning path.
Single-tenant retail lease term and balloon exposure
Compare lease expiration, option decisions and mortgage balances on the same timeline before relying on a long retail lease for refinance support.
Credit tenant lease financing and lease-document dependence
Determine how lease terms and tenant obligations drive financing fit. Includes lease-to-credit evidence map with exceptions for specialist review.
Sources and applicability
The references support the specific points identified above. Preparation questions, checklists and hypothetical decisions are the publication’s analysis, not instructions issued by the source or a lender.
- Realty Income — 2025 Form 10-KBusiness / Asset Management; MD&A / Leasing and re-leasing costs · Checked 2026-10-21
Issuer-specific business and expense disclosure, not a definition of all net leases.
- Realty Income — Q2 2025 SupplementalLeasing Activity, same-client versus new-client re-leasing · Checked 2026-10-21
Used for analytical schedule structure; reported portfolio figures are not adopted as assumptions.
AI-assisted research and preparation. Published by Jaken Finance Group. Reviewed by Jason Taken on 2026-10-21. Report a correction.