Evaluating tenant credit worthiness for office, retail and industrial properties in the US?
1. How do landlords evaluate credit worthiness of prospective tenants?
2. Is there something akin to credit score of individual?
3. Can you pull tenant credit report from credit bureaus etc?
4. Where do you typically get the data on tenant' financial history to evaluate credit worthiness?
[{"id": "gakspiq", "text": "Income statement &amp; balance sheet", "replies": [], "depth": 1}, {"id": "gakwcx0", "text": "Yeah there\u2019s Bradstreet and Dun reports. Fairly reliable but I\u2019ve seen a bunch of erroneously things reported on a lot of different small businesses.", "replies": [{"id": "galuzzt", "text": "I just checked my company's rating and it's inaccurate / unreliable. They do have an API though, which is a plus for me.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gal732q", "text": "Lubermans business credit reports, then bank statements, and last make sure to get a large security deposit.", "replies": [], "depth": 1}, {"id": "galfdoy", "text": "Surprised this hasn't been said yet. For corporate tenants, corporate bond credit ratings are the gold standard. There are three big credit bureaus, but the one that is most easily accessible and free to view ratings is Moody's. You need to create a free account on [their website](https://moodys.com), but then you can look up any company and see if they have issued rated bonds. If they have, they'll be mapped to a corresponding credit score, with \"Baa3\" and above being considered \"credit grade\".\n\nMany lenders use the corporate bond rating criteria to make credit decisions, especially for single-tenant, net-lease assets.", "replies": [{"id": "galuvjw", "text": "This is great, thanks.", "replies": [], "depth": 2}, {"id": "galz01o", "text": "Thought this was too obvious to say lol. Figured OP meant non-publicly traded companies", "replies": [{"id": "gaon4xd", "text": "Looking for both - public and private companies. Looks like Moody's is good for public and D&amp;B for private / Small Businesses.", "replies": [{"id": "geziqpa", "text": "Honestly, D&amp;B is pretty useless for most private companies.  Most private companies don't generate enough info to have reliable data.\n\nSource:  I worked corporate finance for multiple small companies with super high D&amp;B scores.  We were absolutely not \"credit worthy\" by any stretch of the imagination.  One of these companies was even reliably missing payroll and stretching payables past 6 months.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gbbic6s", "text": "I work on acquisitions of single tenant, net leased properties with tenants that are not credit-rated, or you could say \"sub investment grade tenants\".  Usually that just means they make less than $100M in revenue annually and haven't been rated by Moody's, etc.  We ask tenants to give us the \"open kimono\" as I like to say and show us ALL of their financials, along with multiple meetings with their CFO or whoever is most relevant there.  It takes a lot of work, and we have a small credit advisory team that really dives in to get a feel for what risks are present.  \n\nYou can find some attractively priced properties because the tenant is perceived as risky, but if you find that they are much stronger than that perception, you've found something close to arbitrage in my opinion.  Credit and risk analysis is not a cold calculation of course, so it takes some experience to have a good feel for it (this is why we hired a team of experienced credit analysts).", "replies": [], "depth": 1}, {"id": "gbz4imq", "text": "[Creditntell](https://www.creditntell.com/) is a great resource to check prospective tenants' financial history. It is not free but in the past I found this resource incredibly valuable.", "replies": [], "depth": 1}]