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OVERVIEW
In commercial real estate, a Schedule of Real Estate Owned (SREO) is a detailed document that lists all properties currently owned by an individual or entity. It’s most commonly used by borrowers when applying for a commercial mortgage loan to demonstrate their real estate portfolio, experience, and financial strength.
KEY ELEMENTS
(1) Property Name/Address – Identifies each property owned. (2) Property Type – E.g., office, retail, multifamily, industrial, land, etc. (3) Ownership Interest. (4) Percentage owned if it’s a partnership or joint venture. (5) Purchase Date and Purchase Price. Shows the original acquisition cost and timeline. (6) Current Market Value. Often based on appraisals, broker opinions, or owner’s estimate. (7) Outstanding Loan Balance. Shows how much is still owed on the property’s mortgage. (8) Monthly Income & Expenses. Includes rent collected and operating costs. (9) Net Operating Income (NOI). Income after operating expenses (excluding debt service). (10) Equity. Market value minus outstanding debt, indicating the owner’s stake.
WHY IT MATTERS
Lenders use the Schedule of Real Estate Owned to (1)) evaluate the borrower’s experience in managing commercial properties. (2) Assess the financial health and liquidity of the borrower. (3) Determine the borrower’s debt service obligations and ability to take on more debt. (4) In short, it helps lenders gauge the risk level of lending to a borrower and is a key part of most commercial loan application packages.