An OM in real estate is an offering memorandum—a broker-prepared marketing document used in commercial real estate to present a real estate offering and summarize an investment opportunity for prospective investors. A high quality OM (sometimes called a real estate OM or offering memorandum OM) typically includes information about the property (location, photos, maps, tenant and lease details), financial information (historical results and a pro forma), a rent roll, sales comparables (comps), and the key points a buyer needs to decide whether to spend time and money on due diligence. The OM is not a substitute for verification; it’s a starting point to underwrite cash flow, understand the investment process, evaluate risks associated with the deal, and decide whether the opportunity fits a long term strategy.

For more details, keep reading.

What Is an OM in Real Estate? (Offering Memorandum Definition in Commercial Real Estate)

If you’re asking what is an om in real estate, you’re usually looking at a PDF from a broker that describes a deal—often an office building, retail center, industrial property, or multifamily asset.

An offering memorandum (also written as offering memorandum in real, memorandum in real estate, or offering memorandum OM) is a sales package. In commercial real estate, it’s the standard way a broker or seller’s team shares a structured overview of the asset and the business case for buying it.

Think of the OM as the “pitch deck” for a property:

• It markets the property

• It frames the investment opportunity

• It provides key information and data that potential buyers use to decide whether to engage

The OM is part of the broader investment process: it helps attract potential investors, start conversations, and move interested parties into a more detailed underwriting and due diligence track.

Why OMs exist (and why they’re used so often)

Commercial deals often involve:

• larger capital commitments

• more complex leases

• more detailed financial underwriting

• multiple stakeholders and timelines

A well-made OM makes it easy for investors and their teams to quickly understand the deal, ask better questions, and decide what to do next—without having to chase random documents from day one.

What a Real Estate OM Is (and What It Isn’t): Marketing Document vs Due Diligence

A real estate OM is extremely useful, but it’s important to understand its role correctly.

What the OM is meant to do

An OM is meant to:

• present the real estate offering in a professional format

• highlight the asset’s strengths (location, tenant mix, rent story, upside)

• provide initial financial information so investors can model cash flow

• share a narrative around the opportunity (value-add plan, lease-up, etc.)

In other words, it’s a marketing tool designed to generate interest and help a buyer decide whether the deal is worth pursuing.

What the OM is not meant to do

An OM is not a guarantee. Even a high quality OM can include assumptions, estimates, and forward-looking projections that need to be tested.

That’s why the OM should be treated as:

• a starting point for underwriting

• a roadmap for your due diligence checklist

• a summary of what the seller/broker believes is important

But it is not a replacement for verifying:

• leases and tenant payments

• real operating expenses

• rent roll accuracy

• condition and capital needs

• legal and zoning issues

Why confidentiality agreements often come first

In many commercial transactions, you’ll be asked to sign a confidentiality agreement (sometimes called a confidentiality or agreement) before receiving the OM or additional supporting documents.

That’s common because:

• the seller doesn’t want sensitive financial data shared publicly

• the rent roll and tenant terms can be competitively sensitive

• the broker wants to control distribution of the deal package

If you see an OM gated behind an NDA, that’s normal in commercial real estate—especially for higher-profile properties.

If you’re planning to move to Western New York, or if you’re already a local resident, understanding how commercial real estate deals are marketed with an offering memorandum is just one part of your life in Western New York. For more helpful tips on real estate and local market guidance, be sure to check out our latest blog on Carol Klein WNY Homes, where we cover practical insights for buyers, sellers, and investors.

What’s Inside an Offering Memorandum OM? (Key Points, Property Info, and Financial Data)

Most OMs follow a fairly standard structure. The exact sections vary by broker and property type, but the content usually includes the same building blocks.

Executive summary: the deal story in one page

This is where the OM lays out the key points:

• what the property is

• why it’s an interesting investment

• the “headline” numbers (price guidance, cap rate guidance, NOI, etc.)

• timing and process notes

If you’re busy, this section tells you whether you should keep reading.

Information about the property (location, photos, maps, and basics)

A typical OM includes:

• photos (exterior/interior)

• maps (aerial, parcel, proximity to demand drivers)

• property details (size, parking, construction type, year built)

• notes about improvements or renovations

• narrative around the location and tenant demand drivers

This part is designed to make it easy to visualize the asset quickly and share it internally with your team.

Rent roll and lease details

For income-producing commercial property, the rent roll is central. The OM usually summarizes:

• tenant names (sometimes masked until later)

• leased square footage

• rent amounts and escalations

• lease start/end dates

• options, renewals, and key clauses

The rent roll is often where investors find the real underwriting questions: lease rollover risk, tenant concentration, and whether current rent is above/below market.

Financial information: historical results + pro forma

This is where the OM moves from “property brochure” to “investment underwriting.”

Most will include:

• historical income and expense summary (sometimes multiple years)

• a T12-style view or annualized view

• a pro forma (forward-looking model assumptions)

The pro forma often shows what the broker believes the deal could achieve—higher rents, better occupancy, reduced expenses, or other operational changes. That can be valuable, but it also needs to be tested during due diligence.

How Prospective Investors Use an OM to Underwrite Cash Flow (and Decide Whether to Spend Time on Due Diligence)

An OM is designed to help prospective investors and potential investors make fast “go / no-go” decisions before they invest more time, travel, and third-party costs.

The quick underwriting workflow

A common workflow looks like:

1. Read the summary and key terms

2. Review rent roll and lease profile

3. Check the financial section for income, expenses, and NOI logic

4. Compare to sales comparables (comps) to see if pricing is in range

5. Identify the top 5 risks associated with the deal

6. Decide whether to pursue next steps in the investment process

This process helps investors avoid falling in love with photos and instead focus on fundamentals.

Cash flow starts with the rent roll and verified income

Even if the OM shows attractive numbers, cash flow underwriting usually begins by validating:

• which rent is contractual (lease) vs. assumed

• whether reimbursements are real and collectible

• whether vacancy/credit loss assumptions are reasonable

If the rent roll and financials don’t align, that’s a signal to slow down and ask for backup.

Comps help you sanity-check the story

Sales comparables (or comps) aren’t perfect, but they help you understand:

• what similar assets sold for

• how the market is pricing risk and income

• whether the offering is priced aggressively or conservatively

A strong OM doesn’t just throw comps in a chart. It explains why those comps are relevant and how the subject property compares.

Raising capital and communicating the deal

For teams that raise capital, the OM can be a starting resource for internal communication—helping partners and stakeholders understand the deal narrative, risks, and potential upside. Many teams will create their own internal summary “without” relying solely on broker language, but the OM helps shape the initial conversation.