Commercial Real Estate Offering Memorandum: What It Can't Say

A commercial real estate offering memorandum is the document you send a qualified buyer, usually once a confidentiality agreement is signed: the property, the rent roll, the market, the terms, and the story you would like them to believe about all four. Nobody regulates what goes in it. No standards body specifies its contents, and the rules that genuinely reach it are not the ones most brokers expect.

Here is the part the templates leave out. An offering memorandum is a marketing document when the thing being sold is the building. When the thing being sold is an interest in the entity that owns the building, the same document may be doing a job that federal securities law has firm opinions about, and the disclaimer on your cover page is not the protection you think it is. Congress voided that kind of protection in 1933, in one sentence, and it is still there.

What goes in a commercial real estate offering memorandum, and who decided that

The conventional answer is well settled by practice: a cover page, a confidentiality statement, an executive summary, the property description and photography, the financials and rent roll, the market and submarket analysis, the offering terms, and the broker's contact details. Every list you will find online says roughly that.

The interesting question is who decided it, and the answer is nobody.

We looked for a specification across four research passes. The 2026 NAR Code of Ethics, effective 1 January 2026, runs to 17 Articles covering agency duties and truthfulness in advertising, and says nothing about the contents of an offering memorandum. CCIM does not publish its own competing code: its bylaws state that the Institute adopts NAR's. We found no contents specification from SIOR, RICS, the Appraisal Institute, or any Commercial Information Exchange, and we did not exhaust SIOR's and the Appraisal Institute's full publication catalogues, so treat that as "not found" rather than "does not exist."

Which leaves the guides. Here is who publishes the "what to include in an OM" content that ranks, and what each of them sells:

None of that is a scandal, and several of those guides are perfectly good. But it does mean the format of the most important document in a commercial transaction is set by convention and by the people selling tools to produce it, not by any authority, and nobody is checking it against a standard because there is no standard to check it against.

The rules that do reach the document come from somewhere else entirely.

The line the templates never draw

Ask what you are actually selling.

If the buyer takes title to the real property, you are selling real estate, and the offering memorandum is marketing. If the buyer takes an interest in the limited liability company, limited partnership or trust that owns the real property, you may be selling a security, and a different body of law applies to the same PDF.

The Securities Act's definition of "security" is deliberately wide. 15 U.S.C. 77b(a)(1) lists the obvious instruments and then includes "investment contract" and, at the end, "any interest or instrument commonly known as a 'security'." The test for an investment contract comes from SEC v. W.J. Howey Co., 328 U.S. 293 (1946), a case about orange groves sold with a service contract, where the Supreme Court held that the question is whether the scheme "involves an investment of money in a common enterprise with profits to come solely from the efforts of others," and added that it is "immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise."

Nominal interests in physical assets. That is a fractional interest in a building, described in 1946.

Two later points close the obvious escape routes. In SEC v. Edwards, 540 U.S. 389 (2004), a unanimous Supreme Court held that "an investment scheme promising a fixed rate of return can be an 'investment contract' and thus a 'security' subject to the federal securities laws." A guaranteed preferred return does not take a deal outside the definition. It never did.

And on the structure commercial brokers meet most often, a self-regulatory body has said so directly. NASD Notice to Members 05-18, published 2 March 2005 and still served by FINRA without a supersession marker, addresses tenant-in-common interests used in Section 1031 exchanges:

TIC interests are generally investment contracts because the tenants in common invest in an undivided fractional interest in the rental real property by pooling their assets and sharing in the risks and benefits of the enterprise, while obtaining profits derived predominantly from the efforts of others, such as through contracts concerning leasing, management and operation of the acquired property.

Note the qualifier. "Generally," not always, and the analysis turns on the facts of the particular structure. A genuine tenancy in common between two people who both make decisions is not the same animal as a 30-investor program with a manager attached. That distinction is the whole game, and it is not one a template can make for you.

The notice is 21 years old. We checked FINRA's own archive and found no later notice superseding it, and no supersession banner on the page, but we did not find a published FINRA statement that pre-2007 NASD notices remain in force as a general rule. Read it as strong evidence of the staff's thinking rather than as today's final word.

Regulation D never mentions the document everyone calls a PPM

Say the interest is a security and the sponsor is relying on Regulation D, which is the usual route. What does the law actually require you to hand over?

We read the rule. 17 CFR 230.502(b)(1), from the Code of Federal Regulations annual edition, says:

If the issuer sells securities under 230.506(b) to any purchaser that is not an accredited investor, the issuer shall furnish the information specified in paragraph (b)(2) of this section to such purchaser a reasonable time prior to sale. The issuer is not required to furnish the specified information to purchasers when it sells securities under 230.504, or to any accredited investor.

Two things follow immediately. Sell only to accredited investors and the rule requires no specified disclosure at all, which surprises people. And the rule attaches a note advising issuers to consider providing the information to accredited investors anyway, "in view of the anti-fraud provisions of the federal securities laws," which is the first hint of where the real exposure lives.

Then look at what the disclosure is, when it is owed. Rule 502(b)(2)(i) defines it by cross-reference: an issuer eligible to use Regulation A must furnish "the same kind of information as would be required in Part II of Form 1-A," and one that is not must furnish "the same kind of information as required in Part I of a registration statement" it would be entitled to use.

Here is what that adds up to, and it is the thing worth carrying out of this post. Regulation D does not use the phrase "private placement memorandum." It does not use the phrase "offering memorandum" either. We read Rules 502, 504, 506, 507 and 508 and neither phrase appears in them. The most important document in a private offering, the one every sponsor produces and every lawyer charges for, is named nowhere in the rule everyone says requires it.

That is not a loophole and it is not an argument for skipping the document. It is an argument for understanding why it exists. The PPM is a convention that grew up around two obligations: the cross-referenced disclosure above, when non-accredited investors are involved, and the antifraud provisions, which apply to everyone all of the time. It is a container the market built. Nothing about its shape is prescribed, which is exactly why its contents are worth thinking about rather than inheriting from a template.

One more number worth having, from Rule 506(b)(2)(i): there may be "no more than, or the issuer reasonably believes that there are no more than, 35 purchasers" in offerings under the section "in any 90-calendar-day period."

Can you put the deal on your own website?

This is the question we get asked, since we build the websites. The answer is yes with a condition that costs real work.

Rule 506(c) is the branch that permits general solicitation, which includes advertising a deal publicly. The SEC's own plain-language page puts the trade plainly: an issuer may broadly solicit and generally advertise, provided all purchasers are accredited investors, the issuer takes reasonable steps to verify that status, and the other Regulation D conditions are met.

"Reasonable steps to verify" is the part that gets skimmed. The rule text says:

The issuer shall take reasonable steps to verify that purchasers of securities sold in any offering under paragraph (c) of this section are accredited investors.

It then offers non-exclusive, non-mandatory methods, and they are documentary rather than declaratory: reviewing IRS forms such as W-2s, 1099s, Schedule K-1s or Form 1040s for the two most recent years plus a written representation; reviewing bank statements, brokerage statements, tax assessments or appraisal reports dated within the prior three months together with a consumer report; or written confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney or a certified public accountant.

A checkbox saying "I am an accredited investor" is not on that list.

So the practical shape for a commercial brokerage site is not complicated. Marketing the property itself, publicly, is ordinary business. Marketing an interest in the entity, publicly, drags you into 506(c) and a verification process, and a gated deal room for pre-qualified relationships is a different posture from an open page with a download button. The difference is worth deciding on purpose rather than discovering later, and it is worth deciding with counsel who can see your actual structure.

The disclaimer on page one does less than you think

Nearly every offering memorandum opens with the same block: this memorandum is not an offer to sell securities, the recipient may not rely on its contents, all information should be independently verified, the broker makes no representation as to accuracy.

If what you are selling is a security, that block cannot do the job it appears to do, and the reason is older than any of us.

15 U.S.C. 77n, section 14 of the Securities Act of 1933, is one sentence long:

Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this subchapter or of the rules and regulations of the Commission shall be void.

Its counterpart, 15 U.S.C. 78cc(a), does the same for the Exchange Act, and Dodd-Frank widened it in 2010 to cover self-regulatory organisations as well:

Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of a self-regulatory organization, shall be void.

Courts apply this to disclaimers in offering materials. In In re National Century Financial Enterprises, Inc., Investment Litigation, an opinion filed 20 December 2007 in the Southern District of Ohio, the court considered an underwriter's disclaimers in offering materials and wrote that "Section 29(a) of the Securities Exchange Act prohibits the waiver of the substantive obligations of the Act," quoting authority for the proposition that "a party cannot disclaim liability for fraudulent misrepresentations by placing a disclaimer to that effect in a contract," and concluded: "Thus, the Court finds that Credit Suisse's purported disclaimers do not preclude Plaintiffs from pleading justifiable reliance."

Be precise about what that is. It is a ruling on a motion to dismiss, not a final judgment on the merits, and the underlying instruments were securitized healthcare receivables rather than real property. It tells you how a court reasons about disclaimers in offering materials. It is not a commercial real estate precedent.

And on that point, a gap worth stating plainly: we could not find a single decided case testing a non-reliance or disclaimer clause inside a commercial real estate offering memorandum. The developed case law on non-reliance clauses concerns signed, bargained-for agreements such as purchase and sale contracts and merger agreements. An offering memorandum is usually unsigned by the recipient and circulated before any contract exists, which is a materially different posture, and it does not appear to have been squarely litigated. That is not a reason to relax. It is a reason not to rely on confident claims in either direction, including ours.

The disclaimer still earns its place. It manages expectations, it establishes the confidentiality terms, and it sets out that the buyer must do their own diligence. What it cannot do is convert an inaccurate statement into a permitted one.

Getting paid when the sale is an entity sale

This is the section most likely to affect a broker personally, and it is the one the templates never raise.

Return to NASD Notice to Members 05-18, which is unusually direct about real estate licensees:

It is our understanding that the SEC staff would deem a real estate agent's receipt of a referral fee from a broker-dealer in connection with the sale of a TIC interest to be the type of activity that would render the real estate agent an unregistered broker-dealer.

The notice supports that with a footnote to John Wirthlin, SEC No-Action Letter (19 January 1999), in which no-action relief was denied to a person who would solicit investments in real estate limited partnership interests and receive a payment if referred investors purchased them. Relief denied is a more useful signal than relief granted, because it tells you where the staff draws the line rather than where it makes an exception.

The general principle behind it has been stated by SEC staff repeatedly. In her official statement of 7 October 2020, then-Commissioner Allison Herren Lee quoted the staff position from Brumberg, Mackey & Wall, PLC (17 May 2010): "A person's receipt of transaction-based compensation in connection with these activities is a hallmark of broker-dealer activity." The same footnote cites 1st Global (7 May 2001) to the same effect. Two staff letters nine years apart, saying the same thing.

You may have heard that a "finder" exemption fixed this. It did not, because it never happened. The SEC proposed a conditional exemption from broker registration for finders in October 2020, and it was never adopted. As of this writing the topic has been reopened as a fresh rulemaking: RIN 3235-AN69, "Regulatory Status of Finders," appears in the Unified Agenda at proposed rule stage, in the agenda for the first time, with a notice of proposed rulemaking anticipated in October 2026. That means there may be something to read soon. It also means there is nothing to rely on now.

None of which says a commercial broker cannot be involved in an entity-level transaction. It says the compensation structure is the thing that attracts attention, and that it is a question for a securities lawyer before the deal, not after.

If a broker-dealer is in the deal, FINRA's rules reach your document

One more body most commercial brokers have never had reason to read. If a FINRA member broker-dealer participates in the offering, Rule 2210 governs the communications, and its definitions are broader than they sound.

A "retail communication" is any written or electronic communication "distributed or made available to more than 25 retail investors within any 30 calendar-day period." Send the same memorandum to 26 prospects in a month and you are inside that definition. The rule then requires that "an appropriately qualified registered principal of the member must approve each retail communication before the earlier of its use or filing with FINRA's Advertising Regulation Department," and communications must be retained for the period required by SEA Rule 17a-4(b).

There is an exclusion worth understanding correctly: offering documents for offerings exempt from SEC and state registration are excluded from the pre-use filing requirement. That is not the same as being excluded from principal approval, and the distinction is easy to misread in a hurry.

This is also live, which is unusual for a rule. FINRA published Regulatory Notice 26-14 on 9 July 2026, seeking comment on modernising Rule 2210, including replacing the prescriptive pre-use approval requirement with a risk-based test weighing factors such as "nature and complexity of products or services that the communication concerns." The comment period expires 11 September 2026. If your deals routinely involve a broker-dealer, that is a document worth reading now rather than after it changes.

And note how this connects back. Since 2010, 15 U.S.C. 78cc(a) voids any provision binding a person to waive compliance with "any rule of a self-regulatory organization." A disclaimer cannot waive FINRA's rules either.

Nobody will show you what your E&O excludes

The obvious next question is whether your errors and omissions policy follows you across the line into an entity sale. We tried hard to answer it from public documents and could not.

Standard real estate E&O policies are widely reported to exclude claims arising from securities transactions and property syndication. We wanted the actual policy language, so we went to the nine state real estate commissions that run or mandate group programmes: Louisiana, Iowa, Kentucky, Wyoming, Nebraska, Colorado, New Mexico, North Dakota and South Dakota. Not one of them publishes the policy form.

What they publish is the programme. Louisiana's commission names its administrator and its price, $149 for $100,000 per claim and $300,000 aggregate with a $1,000 deductible. Kentucky's commission states the minimums from its own regulation: at least $100,000 per claim, a $1,000,000 annual aggregate, rising to $2,000,000 for firms with 41 or more affiliated licensees, deductible capped at $2,500. North Dakota and South Dakota describe their programmes and name the administrator.

New Mexico goes furthest, and it is instructive precisely because it goes furthest. 16.61.5.9 NMAC, effective 1 January 2002, specifies the minimum terms the group policy must provide, beginning with:

coverage of all acts for which a real estate license is required, except those illegal, fraudulent or other acts which are normally excluded from such coverage

A state rule defining the exclusions as the ones normally excluded is a rule that defines nothing. It tells a licensee to go and read a document the state does not publish.

To be exact about our own limits: we reached only the landing pages for Nebraska and Colorado, so those two are unexamined rather than confirmed. And the one court decision commonly cited for these exclusions, Continental Casualty Co. v. HomeCorp Management, appears to exist only behind a paid legal database, so we cut it rather than describe an opinion we could not read.

The finding is the absence. Across nine government programmes, the only parties who will tell a broker what their policy excludes are the parties selling the policy. If you are contemplating anything at the entity level, the version of this that matters is your own policy document, requested from your own carrier, read before the deal. Our post on E&O insurance requirements by state covers the mandates themselves.

What the state advertising rules do and do not say

State real estate rules do reach marketing materials, and the pattern is consistent across the seven states we checked. Each requires the firm or broker to be identified. New York's 19 NYCRR 175.25, effective 2 November 2020, defines advertising to include "promotion and solicitation related to licensed real estate activity, including but not limited to, advertising via mail telephone, websites, e-mail, electronic bulletin boards, business cards, signs, billboards, and flyers," and requires the broker or brokerage name plus an address or telephone number. California requires the licence identification number and the responsible broker's name on solicitation materials intended to be the first point of contact with consumers. Texas, Florida, Illinois, Georgia and Washington all require firm identification in advertising, with varying rules about prominence.

What none of the seven says is whether a document delivered privately, to one identified party, after a confidentiality agreement has been signed, is "advertising" at all.

We should own this one, because our own first research pass got it wrong. It read California's "first point of contact with consumers" language and concluded the rule reaches an offering memorandum's cover page. That is an inference, not a finding, and no state authority we could locate supports it either way. An OM delivered post-NDA to a vetted counterparty is close to the opposite of a first point of contact. The honest answer is that the question is unresolved in all seven states, and that putting your firm's name and licence details on the document costs you nothing and closes the question.

What happens when the representations are false

The consequences are not theoretical, though the reported cases turn on what was said rather than on the document it was said in.

On 27 February 2026, Joshua Schuster pleaded guilty before U.S. District Judge Valerie E. Caproni to one count of securities fraud. On 11 August 2026 he was sentenced to four years in prison, three years of supervised release, and forfeiture of more than $13,830,665, with restitution to be determined. The Department of Justice describes the conduct this way:

SCHUSTER induced investors to contribute capital to his projects by promising them equity in high-end real estate developments, and by representing that investor funds would be used exclusively for the acquisition and development of specific New York-based projects. Instead, SCHUSTER misappropriated in excess of $13 million dollars in investor money to fund his lifestyle

The SEC had charged him civilly in May 2025 under Securities Act section 17(a) and Exchange Act section 10(b) with Rule 10b-5. We found no published disposition of that civil case as of 20 August 2026.

One honest caveat, because it matters. DOJ's releases never use the phrase "offering memorandum." They describe promises and representations, not documents. This is not a case about an OM. It is a case about what happens when the things said while raising money for a real estate project are not true, whatever they were written on, and about the fact that the antifraud provisions do not care about the format.

What nobody has measured

Whether any of this document craft affects outcomes is unknown.

We looked for research connecting an offering memorandum's quality, length, format or delivery method to anything measurable: qualified inquiries, time on market, price achieved, lease-up speed. We searched the open web, SSRN, and NBER's own site and topic index, and ran searches naming Google Scholar and the Journal of Real Estate Research, the Journal of Real Estate Finance and Economics, and Real Estate Economics. Nothing on point surfaced. We did not query Google Scholar's own interface directly or search those three journals on their publisher platforms, which are paywalled, so the accurate statement is that no study surfaced where we could look.

What did surface was vendor marketing, some of it making specific claims about lease-up speed and investor interest with no study, sample or method behind them. That is the same pattern we found in commercial listing data, where there is no MLS and every published number about the platforms comes from someone selling access to them.

So treat anyone who tells you a better memorandum wins more deals as expressing a preference. It is probably a sensible preference. It is not a measured one.

What this means for how you send it

Nothing here argues for a worse document. It argues for knowing which document you are holding.

Decide what is being sold before you decide what to write. Real property or an interest in an entity. That single question determines whether you are producing marketing or something that sits inside federal securities law, and it is a question for counsel when the structure is anything other than a straight asset sale.

Do not let a template make that decision for you. A file named "OM template" carries assumptions about the transaction it was built for.

Assume the disclaimer manages expectations rather than liability. It sets the confidentiality terms and tells the buyer to do their own work. It does not make an inaccurate number acceptable, and if the interest is a security, two federal statutes say so directly.

Treat the delivery channel as a decision. A private, credential-gated deal page for pre-qualified relationships and an open, indexable page with a download link are different legal postures once an entity interest is involved, not just different user experiences.

Put your firm name and licence details on it. Every state we checked requires identification in advertising, and none of them resolves whether your OM counts. The cheap move closes the question.

Get your own E&O policy in front of you. Not a summary, not a broker's web page. The form, with the exclusions, requested from your carrier.

That is the part we can help with, and the part we cannot. We build the commercial real estate websites that these documents live on and are delivered through, and we can make the gated version work properly. What goes inside the document, and whether your deal is an asset sale or a securities offering, is a question for your lawyer. Anyone in our line of work telling you otherwise is selling something. If you want the delivery side built properly, tell us about the deal.

The short version

There is no standard for a commercial real estate offering memorandum. NAR's current code does not mention it, CCIM adopts NAR's code, and no other body we could find publishes a specification, so every contents guide online comes from a party selling software, templates, courses or services.

The rules that do reach the document are federal and they turn on structure. Sell the building and it is marketing. Sell an interest in the entity that owns the building and you may be selling a security, which Howey defined in 1946, which a fixed return does not avoid, and which NASD said in 2005 is generally what a tenant-in-common interest is.

Regulation D never names the document. Rule 502(b) defines the required disclosure by reference to Form 1-A and to a registration statement, and requires nothing at all when every purchaser is accredited, while the note attached to it points at the antifraud provisions that always apply.

The disclaimer on your cover page cannot waive those provisions, because 15 U.S.C. 77n and 15 U.S.C. 78cc(a) make such waivers void, and since 2010 the second one reaches self-regulatory rules too.

The compensation is where a broker's personal exposure lives, because transaction-based payment is what regulators look at, and the finders exemption people remember was proposed in 2020 and never adopted.

And nobody has measured whether any of it sells a building faster.