Commercial Real Estate

How to create and read offering memorandums

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How to create and read offering memorandums

A real estate offering memorandum is a document used to inform prospects about the details of a real estate opportunity. The prospects could be associates, third party contributors, brokers, investors or real estate agencies. Once a prospect reads through the document, they should have a thorough understanding of the real estate opportunity, including the size, legal tender, locality, facilities, tax information, previous ownership, etc. The real estate offering memorandum is an essential tool to convey a real estate company’s professional approach and generate interest among prospective investors.

Creating and reading a real estate Offering Memorandum

The real estate OM should comprise the aesthetic presentation of information and detailed insight into the real estate opportunity. It is important to present accurate information with specified details to retain the real estate venture’s legitimacy and interest.

CRE Offering Memorandum Sample Image

Real estate OM’s can vary in design, content and specifications, but here are the essential aspects of a real estate offering memorandum, whether you’re reading it or drafting one for the future.

The first impression is the best impression

Investors expect information to be laid out neatly and appealing to their business goals. The right choice of colors, layout, presentation and the feel of paper are all vital to creating a good impression Having a great investor deck is pretty much a must..

Let’s delve deeper. Let’s look at what a sample offering memorandum includes.

1. The cover page

A well-designed cover page will lure readers and convey your brand’s message effectively. If you don’t have a brand, this is an opportunity to build your reputation. When the cover page contains the necessary information like brand colors, logo, property pictures and other attractive aspects of the deal, it’s a winning strategy.

2. Content overview

Include a table of contents at the beginning of the real estate offering memorandum to give the reader an overview of the information. People in the business get to pick what they read first. New investors gain clarity of the real estate opportunity. 

3. High-quality images

The use of high-quality images make the viewers’ experience worthwhile. Make sure that the photos in the OM are top-notch and professionally incorporated.

4. An aerial view

One of the most necessary aspects of a real estate proposal or OM is to reveal the property’s aerial view. Picking the right angle to show off a prime property from above is a great idea. The aerial view will provide access to the nearby roads, shops, businesses and much more, adding to the value of the real estate deal. A prime location is an ideal location.

5. A facilities map

An amenities map is a popular inclusion in real estate offering memorandums. Your listing appears more credible and interesting when the amenities data is presented in the form of a map. Also, the location gains prime importance in every real estate venture. With a map, you are one step closer to the deal’s closure. Investors and prospects want to know what’s nearby and what’s accessible in the locality.

Detailed specifics for a good Offering Memorandum

A commercial real estate offering memorandum must be detailed enough to keep the readers and investors well-informed of everything that goes into their decision making. To appear professional, you have to present the information professionally. The specifics should be outlined, and the detailed overview should be spot on.

Let’s find out more about an offering memorandum template.

Offering Memorandum Extracted Fields

The real estate offering memorandum should encourage the reader to take action. Here’s what you should notice when creating or reading an OM.

1. Confidential disclaimer

As a legal document, the offering memorandum should contain a confidentiality disclaimer stating the credibility and transparency of the real estate deal.

2. Executive summary

A concise introduction to the property should give the investor a good idea to continue reading the offering memorandum. The vocabulary should be clear and plain.

3. Financial information

This is the most important part that should be presented in a well-organized and aesthetic manner for the reader to feel comfortable reading.

4. Location information

When you want to attract excellent investments, you have to offer an excellent real estate location. Highlight the special features, access, services and amenities of the locality. Write about the specialty of real estate in the locality. Include facts and figures about the community, the facilities, the transport and more.

5. A call-to-action

A real estate offering memorandum should convert readers into investors. The sales pitch so far in the document might work, but you have to look out for a call-to-action. Show the reader a way to make the next step in the real estate journey. You can position your contact information and details to ensure that the reader gets in touch with you no matter where they are.

Essentially, if these factors are covered in a commercial real estate offering memorandum, the deal is likelier to go through. Whether you’re drafting an OM or skimming through one, be sure to notice the above-mentioned aspects of the document.

A good OM is a mighty sales pitch

When a real estate offering memorandum is well-organized, aesthetically displayed and conveniently informative, it poses professionalism and character.  Docsumo is a document processing automation software for intelligent data capture and extraction. Offering Memorandum processing automation can save a lot of time, money and create high-quality documents for professional use. In case you’re wondering how, Docsumo can tell you what property managers need, what investors are looking for and how to draft compelling OM’s in minutes. In-depth, intelligent documentation automation can streamline the work process while revamping quality and efficiency in creating offering memorandums.

Click here and book a free demo.

Suggested Case Study
Automating Portfolio Management for Westland Real Estate Group
The portfolio includes 14,000 units across all divisions across Los Angeles County, Orange County, and Inland Empire.
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Pankaj Tripathi
Written by
Pankaj Tripathi

Helping enterprises capture data for analytics and decisioning

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