How do you analyse an industrial rent roll for hidden tenant risk?
You analyse an industrial rent roll for hidden tenant risk by reading every line for four things the income figure hides: concentration (how much income rides on one tenant), lease events (expiries, breaks and reviews), covenant (the credit of the tenant and any guarantor) and how hard the unit would be to re-let. The data comes from Yardi or MRI, ARGUS and a credit service such as Creditsafe or Dun & Bradstreet. Scayled does not analyse or score a rent roll. For the lines where a unit is vacant or coming back, it finds 250 to 350 businesses the building suits and the person who signs at each.
- What does a rent roll show, and what does it hide?
- Which risks should you read on every line?
- Which tools do funds use to analyse a rent roll?
- How do you rank the lines once you have read them?
- What should happen to the lines at the top of the list?
- What does Scayled cost, and where does it fit?
What does a rent roll show, and what does it hide?
A rent roll shows what is contracted: each tenant, the unit, the area, the passing rent, the lease start and end, any break, review and option dates, and arrears. Exported from Yardi, MRI or a spreadsheet, it is the starting point for every income and valuation question.
It hides the probability behind each line. Two tenants paying the same rent with the same expiry can carry very different risk: one may be a subsidiary with no parent guarantee in a specialised building, the other a well-capitalised occupier in a standard warehouse that a dozen businesses could use. The roll records the contract, not the chance of the income continuing.
Which risks should you read on every line?
Concentration first: each tenant's share of the asset's and the fund's income, and whether one parent group or one industry sits behind several lines. Industrial rent rolls are often top-heavy, so a portfolio average says little. Then lease events: time to expiry and to the next break, which gives WALE to expiry and WALE to break, and any review that could open a negotiation.
Then covenant: the tenant's credit score and filings, and whether the lease is guaranteed by a parent or backed by a deposit. Finally re-letting difficulty: how many businesses the unit could realistically suit, given its size, eaves height, yard, power and location. A specialised or oversized unit with a weak tenant is the line that does the most damage if it goes.
Which tools do funds use to analyse a rent roll?
Yardi Voyager or MRI holds the lease data and critical dates. ARGUS Enterprise turns the roll into cash flows, and Altus Group's ARGUS Intelligence includes tenant analytics that group a tenant's leases across the portfolio to show its share of NOI, upcoming expiries and below-market rents, drawn from the fund's own ARGUS lease data. VTS shows lease roll alongside leasing activity.
For covenant, Creditsafe, Dun & Bradstreet and Experian provide company scores and monitoring alerts, CreditRiskMonitor covers mainly public companies, and Moody's provides tenant credit data for rated companies to CRE users. Many teams still finish the analysis in a spreadsheet, because the judgement on each line combines all of these sources.
How do you rank the lines once you have read them?
Rank by exposure: the income at stake multiplied by the likelihood of losing it, weighted by how soon the next lease event falls. A moderate risk on the anchor tenant of a large single-let asset outranks a high risk on a small overflow unit.
Then adjust for re-letting difficulty, because the cost of losing a tenant is mostly the time the unit stays empty. Record the evidence behind each judgement (credit alerts, news, what the tenant said at the last meeting) so the ranking can be defended to the investment committee and reviewed on a set rhythm, such as each valuation cycle.
What should happen to the lines at the top of the list?
Each one needs two tracks. With the tenant: open the renewal or regear conversation early, review guarantees and security, and understand what its operation needs. For the unit: prepare a replacement route before any notice is served, so a departure becomes a handover rather than a cold start.
Scayled runs that replacement route. For each unit at the top of the list it assembles 250 to 350 businesses the building fits and the person who decides at each, with an email drafted per business. The fund sends the emails from its own inbox, so it decides who receives one, and the sitting tenant can simply be left off.
What does Scayled cost, and where does it fit?
Scayled sits after the analysis, not inside it. It does not read a rent roll, score tenants or forecast income. It is the action a fund takes on the units the analysis flags as vacant or likely to come back.
The Campaign is priced per flagged unit: US$749 for the Full list or from US$449 for the strongest 100 to 150, one payment with no subscription and no commission, and it runs alongside any appointed agent. For a fund without leasing staff, Scayled can send the emails for US$299 more from one mailbox the fund adds on its company email, with replies landing with the fund. In-house leasing for industrial landlords covers how owners run the rest.
Lease The Vacancy In-House, Before You Appoint An Agent.
The Campaign finds the 250 to 350 businesses the building suits, names the person who decides at each and writes every email, ready in about five days. One payment of US$749 per property, no commission and no subscription. A focused 100 to 150 from US$449.