T-12 (Trailing 12 Months)
A T-12 is a property's income statement showing the trailing 12 months of revenue and operating expenses — the primary document for evaluating actual (vs. pro forma) performance.
What it means
The T-12 presents actual monthly revenue and expenses for the past year. Unlike pro forma, it is historical fact. Buyers should always underwrite to T-12 actuals and separately evaluate whether pro forma adjustments are achievable.
Red flags in a T-12: unusually low management fees or zero replacement reserves (suggests owner self-management with no true cost reflection), expense lines missing entirely (utilities, insurance), one-off revenue items pushed above the line, concessions not reflected, and bad debt written off below the line. Compare each line item to industry benchmarks.
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