Leases and transactions
WALT
Weighted Average Lease Term: the rent-weighted average remaining term of the leases.
WALT is a core investor metric. Long remaining terms from strong tenants secure income, short terms offer upside but also vacancy risk.
Calculation
For each lease, the remaining term until the earliest possible end is determined and weighted by the respective annual rent. The sum is divided by the total rent. Some investors calculate to the first break option, others to the regular expiry. The method should always be stated.
Relevance
A long WALT with strong tenants supports purchase prices and financing. A short WALT can offer opportunities for rent reviews and repositioning, but increases vacancy risk. In single-let assets, the WALT equals the remaining term of the one lease and is therefore particularly meaningful.
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