The tenant improvement allowance the landlord agreed to fund is sitting in the lease as a rent abatement credit, and I want to know how that reads at sale.

Most OMs I have looked at show the face rent only.

The part that gets me is "find it in the lease exhibit only if you read every page" because that is not an accident in most packages I have heard described. The rent schedule is technically in the file, so the broker can say it was disclosed, but they know almost no buyer is going to diff every exhibit against the rent commencement table.

What I want to know is whether you are running the all-in basis from day one as the actual test, or just using it to flag a price negotiation. Because if the $200k TI inflated the rent above what the market would clear without it, the lease renewal risk at year fifteen is real too. A franchisee whose rent was set to recover a landlord build-out is sitting at above-market rent when the term ends, and that is a different exit than the OM implies.

The offering memorandum almost never volunteers that schedule. What you get is the current rent roll, a lease abstract that highlights term, options, rent bumps, and maybe a guarantor summary, and the implication that twelve months of $120k is what the asset does. The abatement years appear only if you pull the full lease, locate the TI section, read the credit mechanism, and then do the arithmetic backward to confirm what actually cleared the landlord's account in years one through three. Brokers are not hiding it in any conspiratorial sense, they are just presenting the asset at its strongest current state, and nothing in standard OM practice requires them to reconstruct historical cash flow.

What I would confirm before acting, with the seller's counsel and the title company, is whether that $200k TI was reflected in the original acquisition financing, because if the seller bought at year two with the abatement still running, the lender's appraisal should show adjusted cash flow for the abatement period, and that appraisal is discoverable. I would also ask the broker directly for the commencement date buildout cost and any landlord work letter, not the lease summary but the actual exhibit, because the recovery rate embedded in the rent tells you whether the $120k was priced to return a build-out or priced at market with the TI as an additional landlord concession. Those are two different credit stories. A tenant whose rent was set at $120k to amortize $200k of TI at a below-market construction rate is a tenant who might have signed for $95k at a market build-out, and that gap matters when you price the option renewals. What is the reported cap rate on the listing, and do you know what the seller originally paid?