Encyclopedia
Offering memorandum (OM)
A marketing document describing a property or business for sale. It's not a guarantee. Separately, under securities law, an offering memorandum is a disclosure document for raising money.
For example: A buyer verifies the OM's figures during due diligence. (Illustration only, not a real deal.)
Official source: BC Securities Commission: investors
Example only, not a real client. Say you get an offering memorandum for a retail plaza. It shows strong projected income. You check its figures against the actual rent roll, leases and operating statements, and find that one tenant’s rent includes a temporary discount. That changes your offer.
What I’d tell a friend
Treat an offering memorandum as marketing. Check its numbers against the real documents before you rely on them.
Why it matters to you
It's written to sell the property, so the numbers show it at its best. Buyers who rely on it without checking the leases, statements and condition reports often find the real income is lower.
How to use it in your deal
Buyers should check every number in the OM against source documents during due diligence: leases, statements, tax notices and reports. Look for pro forma figures labelled as actual, missing expenses, and optimistic lease-up assumptions. Read the disclaimers, which usually say the seller makes no promises about accuracy.
Sellers should make the OM accurate, since misleading information can still cause legal problems and erodes trust with buyers. Tenants don't usually see it, but its assumptions about rent may shape the landlord's next negotiation. If you're being offered units in a property syndicate, get the securities offering memorandum and check the issuer's filings with the BCSC.
Mistakes I see
Treating the OM as verified. Missing pro forma labels. Ignoring disclaimers. Confusing the marketing OM with a securities offering.
In BC and Vancouver
Real estate marketing is overseen through BC Financial Services Authority (BCFSA) rules for licensees. Securities offerings use BCSC rules, including the offering memorandum exemption.
Official sources: BC Financial Services Authority · BC Securities Commission: investors
What it is
An offering memorandum is a marketing package for a property for sale. It usually includes photos, a description, the rent roll, income and expense figures, and market information.
Buyers often have to sign a confidentiality agreement before receiving one.
Reading it carefully
Look for projected or pro forma figures mixed with actual ones. Ask for the source documents behind key numbers.
Confirm lease terms, expenses and area during due diligence. I can review an OM with you.
Questions to ask before you sign
- Are these numbers actual or projected?
- What's not included?
- Where are the source documents?
- Is this a property sale or a securities offering?
Keep reading
Related terms: Data room, Due diligence
Working through this right now? Questions are free. Book a 15-minute call or call or text 604 256 2002, and I’ll give you a straight answer.
Back to the A–Z index · common questions · tactics to watch for · the shorter glossary
General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.