Tenant Screening Alert — 3 Reasons to Run TIL Score Now
2017-07-19
There are many reasons to sign a lease with a new commercial tenant, but missing just one reason to not sign a lease can cost owners big time. A good tenant screening process can bring to light a yellow flag. A great tenant screening process can wave the red flag front and center, saving owners money and time.
This is what makes the (RE)meter’s TIL Score so invaluable. Getting the big picture clear and accurate in an expedited and thorough process can make the difference for any owner to be happy, wealthy, and wise.
What is the TIL Score?
(RE)meter’s TIL Score is a powerful risk assessment tool for commercial real estate professionals to drive the tenant screening process. In three easy steps, the TIL score combines data from the IRS, Department of Labor, and the Census Bureau with tenant financials, the NAICS Code, and specific lease terms of the CRE deal. The TIL Score produces an unbiased and consistent risk assessment on which owners can rely in the lease underwriting process.
Why run the TIL Score?
TIL saves owners time
Not all prospects end up signing a profitable lease, which is why it is important to begin the screening process with prospective tenants as soon as possible. Once a prospect is identified and the lease underwriting process begins, owners intend to move the process along as swiftly as possible. However, gathering financials and running background checks through various avenues can take days, even weeks, depending on the complexity of a CRE professional’s underwriting strategy. Running a TIL Score saves owners time by compiling all of these elements in only a few steps. One tool, the TIL Score, initiates real-time screening of criminal activity, credit reports, tax records, and more. As the report is reviewed in a timely manner, owners are empowered to make decisions quickly and move to other prospects when necessary to find the best fit for their commercial space.
TIL saves owners money
Entering into a long-term commercial lease with the wrong tenant can quickly turn into a giant cash drain in an owner’s commercial real estate portfolio. Not understanding the tenant’s industry of business or missing key factors from a tenant’s tax statements can end up costing owners significant loss. The TIL Score takes into account a prospective tenant’s financial status when and if a lease is executed to see what changes and how a tenant would fare financially given the specific deal.
TIL finds the best fit for an owner’s commercial space
Signing a lease with the right tenant may well be the most important reason of all to run a TIL Score! Some owners run a basic credit check using the three credit reporting agencies, take a glance at the tenant’s financials, and maybe check a few references. The problem with this minimal approach to tenant screening is that it’s short-sighted and incomplete. The right fit for a commercial space is best assessed by looking at the big picture, which includes assessing the tenant’s industry and how the terms of a lease position both tenant and owner throughout the lease duration.
For these reasons, running a TIL Score can be one of the best decisions an owner can make before signing a lease with a commercial real estate tenant. Once the I’s are dotted and the T’s are crossed, it may be too late for an owner who didn’t run the TIL Score to avoid loss associated with high risk tenants.