Actual rent roll
Current rents, reimbursements and other income should support the limit calculation.
Business Income & Rental Value for Commercial Real Estate
For a landlord, repairing the building is only part of the loss. The rent stream may remain impaired during reconstruction, tenant buildout and re-leasing.
What to Review
The details that can change the insurance program.
Commercial real estate insurance is highly dependent on the building, occupancy, leases, valuation, protection and income exposure. A useful review goes beyond simply quoting the same limits.
Restoration period
The estimate should reflect permitting, demolition, construction, inspections and tenant reoccupancy.
Extended period
Income may not immediately return to normal when physical repairs are complete.
Lease structure
Gross, net and percentage-rent structures can affect how income is modeled.
Key Exposures
Questions worth answering before renewal.
Long-lead materialsSpecialized building systems can extend reconstruction.
Tenant lossA tenant may relocate permanently after a severe loss.
Code upgradesOrdinance-or-law work can extend the downtime.
Portfolio interactionA large owner may need location-specific and portfolio-level income assumptions.
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