When income is stable but every lease expires within six months of closing, how do you price that into the assignment fee

Pricing off the broker's cap and hoping the buyer's lender agrees is how I watched a $34k assignment fee turn into a phone call where nobody answered.

What was your actual vacancy on the strip for the trailing 12, not the rent roll date?

The financeable cap is the right number to build from. Here is why that matters practically.

A cap rate (capitalization rate) is the annual net income divided by the property value. At a 7.8 cap on $18,400 per month gross, the seller's broker is treating every dollar of rent as reliable. A commercial lender does not. When income is month-to-month, many lenders credit it at 50 percent or less for underwriting, meaning they act as though half that rent might disappear before closing. That shrinks the loan amount. A smaller loan means the buyer has to bring more cash equity, which lowers the most they can rationally pay, which compresses what you can capture as an assignment fee.

Pricing off the seller's cap and leaving the buyer to negotiate the lender shortfall in diligence tends to kill the deal at the worst moment, after you have both spent time and money on it. Pricing off the financeable cap from the start means you are quoting a real number, and the buyer's lender is unlikely to surprise anyone.

On rollover concentration specifically, the exposure here is meaningful. Six month-to-month tenants plus four expiring within five months in a 22-unit strip means over 45 percent of the rent roll could be gone or renegotiated within six months of closing. A sophisticated commercial buyer will model scenarios: what if three of those tenants walk? The fee structure needs room for that conversation, not a number that assumes full occupancy holds.

One thing worth confirming with a commercial real estate attorney in the relevant state: your assignment contract language needs to clearly disclose the lease schedule and the lender-discount issue, because nondisclosure on something this material creates real liability exposure. That is a question for licensed counsel, not a forum.

What does the underlying lease structure look like on the month-to-month tenants? Are they long-term occupants with verbal renewal patterns, or recent additions? That changes how a buyer's lender is likely to treat them.

The part that got me was "let the buyer negotiate the gap down themselves." I tried exactly that on a 14-unit mixed retail strip in Columbus, 2022, and what actually happened was not negotiation, it was the buyer walking at day 38 after the lender's commitment letter came back $210,000 lighter than expected. I had priced my fee at $34,000 against the seller's ask. By the time the deal died I had burned two weeks of my own due diligence time and a $1,200 inspection I ordered early to look prepared. The buyer was not angry, he just had a different equity check than he thought he did, and the numbers stopped working for him. None of that was recoverable.

What I do now is build a second column in the rent roll tab before I even talk to a buyer, one that applies the 50 percent haircut to every month-to-month and every lease inside 90 days of expiring, then runs the NOI and the cap against a realistic LTV at current rates for that market. Whatever that number spits out as a max purchase price is where I anchor the fee, not to the seller's ask. If the spread between the broker's cap and the financeable cap is wider than about 80 basis points I flag it as a deal that needs a cash buyer or a buyer with a bridge lender who underwrites differently, and I market it that way from the jump. That changes who I'm calling and it changes the timeline expectation I set with the seller. My question back to you is whether your seller actually knows what their rent roll looks like to a lender, because sometimes the broker hasn't shown them that math and it opens a price conversation you wouldn't otherwise get.

Spent three years building tenant improvements for strip centers in the DFW suburbs, so I watched the lease-expiration problem from the construction side before I ever underwrote one. The TI budget alone tells you how serious a landlord is about retention, and a roll of six month-to-months on a 22-unit strip usually means one of two things: either the landlord stopped negotiating extensions because he knew he was selling, or the tenants stopped signing because they're not sure they're staying. Those two situations look identical on the rent roll and price completely differently.

What I'd actually want before I built any fee number is the tenant mix by square footage, not by unit count. Six month-to-months across 800-square-foot nail salons is a different exposure than two of those six being anchor-adjacent spaces at 2,400 square feet each. The financeable cap is the floor, yeah, but the real ceiling on the assignment is whether a buyer can tell a story to their lender that gets those month-to-months to count at more than 50 percent, and that story requires executed estoppels and at least a letter of intent to renew from the biggest tenants before closing, not after. If the wholesaler can't produce those by assignment, the fee gets negotiated down in diligence every single time regardless of how the contract is written. So the question I'd ask the poster: do you have any read on why those six went month-to-month in the first place?