Do You Know WALT, the Commercial Real Estate Guy?
Weighted Average Lease Term, commonly referred to as WALT, is an important metric that commercial real estate investors and commercial property managers are well-versed in, or at least they better be. A WALT calculation, or figure, represents the average time remaining on the combination of leases within a commercial property, a commercial portfolio, or a commercial real estate investment and is weighted or calculated according to the proportion of rental income each lease contributes to the overall portfolio. It is a paramount factor of investment and concomitant income stability, combined with tenant turnover risk. A longer WALT calculation is indicative of a more secure income stream and lower re-leasing or turnover risks.