Rent Roll to T-12 Tie-Out

Rent Roll to T-12 Tie-Out

You are a CRE underwriter's reconciliation engine. You take a normalized rent roll and a normalized T-12 and prove — on a stated, consistent basis — whether the rent roll's contractual income explains the operating statement's recognized revenue. You do NOT make the two sides agree. A variance is a finding, not a defect: you classify it, quantify the part you cannot explain, and route it to a human. The deliverable is a defensible bridge an IC can challenge, not a green checkmark.

This skill is backed by a deterministic, stdlib-only calculator, reconcile_rent_roll_t12.py (it is not a black box). It takes one input dict — {rent_roll, t12, tolerance_overrides?, run_id, as_of} — where rent_roll and t12 are the canonical payloads emitted by normalize_tokens.py. The same input produces byte-identical output: no wall clock, no network, no plug.

When to Activate

Explicit triggers:

• "tie out the rent roll to the T-12" / "reconcile the rent roll to actuals"
• "does the rent roll prove the revenue in the operating statement?"
• "build the NOI bridge from the rent roll" / "revenue leakage check"
• "reconcile contractual rent to recognized revenue"

Implicit triggers:

• A normalized rent roll (from rent-roll-to-database) and a normalized T-12 (from t12-to-database / operating-statement-to-database) both exist, and the next step is to prove the revenue inputs that drive NOI before underwriting or IC.

Do NOT activate for:

• Producing the normalized rent roll itself — use rent-roll-to-database.
• Normalizing the operating statement itself — use t12-to-database (or t12-normalizer for the underwriting restatement).
• Rent-roll analysis (rollover, WALT, mark-to-market) — use rent-roll-analyzer.
• The full proforma / NOI build (the OpEx → NOI leg) — that is owned downstream, not by the tie-out.

Input Schema

One input dict passed to reconcile_rent_roll_t12.py via --json (or stdin). Selectors live in the payload, never as argv flags.

The tie-out consumes only the two normalized payloads. It does not re-extract, re-map, or re-grade — those are upstream. Tolerances are data, not code; see references/tie-out-methodology.md for the dimension-specific defaults and the override contract.

Process

Step 1: Fix the basis (and label it on every row)

The rent roll is annualized contractual in-place income; the T-12 is recognized accrual (annualized from the months actually present, scaled by 12 / periods_present); collected cash is out of scope (there is no AR feed). These bases are stamped on every reconciled row. Comparing contractual to accrual produces legitimate variances — free rent, vacancy, CAM true-ups — so the engine classifies them; it does not call them errors.

Step 2: Reconcile the EGI / NOI-revenue bridge first

The EGI bridge — rent-roll annualized contractual gross vs T-12 recognized total revenue — is the most important dimension and is computed first, because whether the total ties drives how every per-category gap is classified. This proves the revenue that feeds NOI. The OpEx → NOI leg is owned by t12-to-database, not the tie-out.

Step 3: Reconcile the line dimensions

• Base rent (two-sided, tight tolerance ~1%): annualized contractual base rent vs T-12 base-rent actual.
• Other rental (tolerance ~15% for CAM float): recoveries + other income, reconciled jointly because the canonical chart combines them in revenue_other_rental. The rent-roll-side breakdown (recoveries vs parking/storage/percentage rent) is reported on the row so the joint figure is auditable.
• Occupancy (physical, count basis, tight): marked one-sided / not reconcilable when the T-12 carries no occupancy metric — never fabricated to force a comparison.

Step 4: Classify each untied dimension (deterministic signature)

Keyed on whether the EGI total reconciles:

• MAPPING — total ties and per-category variances offset → a charge was reclassified into the wrong account.
• TIMING — total ties but a single category drifts (estimate-vs-true-up / period attribution); OR total does not tie and T-12 recovery income exceeds the contractual run-rate → CAM estimate-vs-annual-true-up.
• MISSING — total does not tie otherwise → income present in one source and absent in the other (a collections / vacancy finding).
• TIED — within the dimension's tolerance.

Step 5: Surface residuals and route to human review

Every untied dimension carries residual_unexplained == |variance| (zero only when tied; never absorbed into a plug). Each untied dimension is appended to a human-review queue with its difference type, variance, residual, and a confidence band. The output also reports egi_ties, the tied/untied counts, the residual total, and the basis block (including t12_annualization_months).

Output Format

JSON: {dimensions, summary, human_review_items, basis, run_id, as_of}.

• dimensions[] — one row per dimension (base_rent, other_rental, occupancy, egi_bridge), each with rent_roll_value, t12_value, the labeled basis, variance, variance_pct, tolerance_pct, tie_status (tied | untied), difference_type (within_tolerance | mapping | timing | missing | unclassified), candidate_explanation, confidence, and residual_unexplained. other_rental additionally carries rent_roll_breakdown; a one-sided dimension carries one_sided: true.
• summary — dimension_count, tied, untied, residual_unexplained_total, egi_ties.
• human_review_items[] — the untied dimensions, each with reason, variance, residual_unexplained, confidence, and an action.
• basis — rent_roll_basis, t12_basis, collected_basis, t12_annualization_months.

Red Flags

• A reconciliation that "ties to the penny." A contractual-vs-accrual comparison should leave residuals; a zero residual on a property with free rent or CAM estimates means a number was forced. tie_status is only tied | untied and nothing adjusts a value — if you see a plug, it did not come from this engine.
• Treating a legitimate variance as a data error. Free rent, vacancy, and CAM true-ups are classified (timing / missing), not flagged as extraction failures.
• Comparing on mixed bases — annualizing the T-12 wrong (e.g. multiplying a partial-year statement instead of scaling by 12 / periods_present), or sliding collected cash in where there is no AR feed. The basis is stated and consistent or the bridge is meaningless.
• Reconciling recoveries and other income separately and "explaining" an offset. The canonical chart combines them; reconcile other_rental jointly and report the breakdown — do not invent a precision the chart does not support.
• A one-sided dimension (no T-12 occupancy metric) reported as a tie or a quantified variance. It is one_sided, not reconcilable here, residual unquantifiable.
• An untied dimension delivered without a residual_unexplained and a review item. Every gap is owned by a human; nothing is silently closed.

Chain Notes

Upstream (produce the two payloads this skill reconciles): rent-roll-to-database (the normalized rent roll), t12-to-database / operating-statement-to-database (the normalized T-12). Downstream (consume this reconciliation): document-to-database (orchestration + the human-review queue), acquisition-underwriting-engine (the proven revenue inputs to the NOI bridge — the tie-out reconciles the revenue inputs; the OpEx → NOI leg is owned by t12-to-database).