Commercial Real Estate Risk Flags: The 8 Underwriting Killers

Most commercial real estate deals don't fail at the closing table — they fail at the submission table. Eight risk flags, recognized early, would prevent the majority of those failures. Recognized late, each can cost 2–4 weeks and a five-figure earnest deposit.

The 8 killers, in roughly the order lenders look for them: (1) tenant concentration above 25% on a single tenant in a single-tenant or small-multi-tenant deal, (2) lease rollover concentration in the next 24 months, (3) below-market rent gap that can't be closed without a major capex program, (4) deferred maintenance flagged in the property condition report, (5) non-conforming use that depends on a special-use permit, (6) Phase I environmental findings — even Recognized Environmental Conditions can stop SBA cold, (7) flood-zone designation requiring lender-mandated flood insurance, and (8) seller financing structure that doesn't pass SBA standby-debt rules if the deal is going SBA.

Each of these is detectable in 15 minutes if you know to look. Half of them are visible in the offering memo. The other half need a quick records pull — county GIS for flood zones, a Pacer search for environmental, a permitting-office call for non-conforming use.

Full guide coming soon. Want all 8 risk flags screened on a specific deal today? Run a free screening — the report covers each line item and explicitly flags any blockers.