Offering Memorandum (OM)
An offering memorandum (OM) is the marketing document a broker prepares to sell a commercial property or raise capital for it. It describes the property, its tenants and financial performance, the market and the investment opportunity, and it is usually the first document a buyer or lender reviews on a new deal.
Why an offering memorandum matters
The OM gives buyers enough information to decide whether to pursue a deal. It typically includes a property summary, photos, rent roll highlights, historical operating results, a pro forma, market analysis and sale comparables.
An OM is written to sell. Its pro forma often assumes rent growth, lower vacancy or lower expenses, so underwriters treat its numbers as a starting point, not a conclusion. Each figure is checked against the rent roll, the T12 and independent market data.
Acquisition teams can receive dozens of OMs a month, so screening them quickly is a large part of their workload.
Offering Memorandum vs. Investment Committee Memo
An offering memorandum is prepared by the seller's broker to market a property. An investment committee memo is prepared by the buyer's own team to recommend whether to invest, based on its independent underwriting. The first argues for the deal. The second tests it.
How Smart Capital Center handles offering memorandums
Smart Capital Center's AI agents read offering memorandums as they arrive, pull the property details and financials into a screening model, and flag where the broker's assumptions differ from market data. Teams decide faster which deals deserve full underwriting.
Frequently asked questions
What is included in a commercial real estate offering memorandum?
Most OMs include an executive summary, property description, photos and site plans, tenant and lease summaries, historical income and expenses, a pro forma, market and submarket analysis, and comparable sales. Many also describe the offering process, bid deadlines and the broker's contact details.
Should buyers rely on the numbers in an OM?
Buyers should treat OM numbers as the seller's case, not verified facts. The pro forma often reflects optimistic assumptions about rents, occupancy or expenses. Underwriters rebuild the numbers from the rent roll, T12 and leases, and compare the market assumptions with independent data.
Is an offering memorandum confidential?
Usually, yes. Brokers typically require prospective buyers to sign a confidentiality agreement before releasing the full OM, because it contains tenant and financial details. A shorter teaser or flyer with limited information is often shared more widely to generate interest.