A metric in commercial real estate that measures how much contract rent is remaining at the property. Specifically, the WALT measures the weighted average remaining contract lease term for all tenants at a property. Generally rental income is used as the weight in calculating the weighted average. Weighted Average Lease Term is an important measurement for analyzing office, retail, and industrial properties.
To calculate the weighted average lease term
- Multiply the current rent by the remaining lease term for each of the tenants
- Sum the total of results from step 1
- Divide the result from step 2 by the sum of current rent for each of the tenants